PRA International, the US-based contract research organisation (CRO) that recently capped a period of restructuring and realignment by announcing a definite merger agreement with its one-time majority shareholder, plans to relocate its corporate headquarters from Reston, Virginia to the Raleigh, North Carolina area by the end of the year.
The company expects to take a charge of around $1.7 million on the move, which it said would help PRA realise its growth plans. The initiative will affect 37 people either working in the Reston office or using it as a regional base. Most of these have been invited to move with the company and PRA is awaiting their final decision, it noted. Of those unable to move, some will work from home and others will relocate to PRA’s offices in Charlottesville, Virginia, where the CRO plans to maintain some of its corporate support services.
The current headquarters “is purely a corporate administrative office with no operational functions”, explained PRA’s chief executive officer Terrance Bieker. "After conducting a comprehensive analysis, we have determined that relocating to the Raleigh area will allow PRA to tap into a stronger market for operational resources, place us in closer proximity to existing and potential new clients, provide ready access to a highly qualified talent pool and reduce our infrastructure costs.”
To fuel the CRO’s planned growth, he added, PRA expected to start “aggressive” hiring in October, with a goal of attracting 500 administrative and operations employees over the next five years. “North Carolina has one of the fastest growing workforces in the United States and we are pleased to take advantage of the low employee turnover rate and the quality of life,” Bieker commented.
Restructure and refocus
Last February, PRA said it was restructuring and refocusing its operations under Bieker’s guidance following a difficult year marked by low revenue growth, high staff turnover and a sharp drop in income. The expectation was that 2007 would be a “rebuilding year”, after which growth might return to market levels or better in 2008.
Instead, and to the chagrin of some investors, PRA announced in July a definitive agreement to be acquired by affiliates of Genstar Capital, a private equity firm that owned 12.8% of the CRO’s shares. Genstar originally acquired PRA in consortium with the latter’s management from The Carlyle Group in July 2001. It subsequently reduced its holding but retained close links with PRA when the CRO floated in November 2004.
The proposed merger, which included a 50-day grace period (ended 12 September) for PRA to solicit alternative offers, is now expected to close in the fourth quarter of 2007.