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The deal is valued at about $600 million, sources say

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Clinical trial sites are experiencing steady growth

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Headlands is a U.S.-based network of clinical trial sites

By Sabrina Valle

NEW YORK, Aug 14 (Reuters) - Private equity firm THL

Partners has agreed to buy a majority stake in Headlands

Research, a U.S.-based network of clinical trial sites, from KKR

, the firms said on Thursday.

The deal is valued at about $600 million, according to

people familiar with the matter who spoke on condition of

anonymity.

Clinical trial sites are experiencing steady growth as big

pharma ramps up research spending, driven by new therapies and

the rising needs of an aging population. AI is speeding up drug

development, and private equity firms are betting that faster

discovery will boost demand for clinical trials.

"We are seeing some really exciting new types of medicine

coming to market, and all those obviously have to go through

clinical trials," Megan Preiner, managing director in THL's

healthcare group, told Reuters.

KKR said it founded the company drawn by the potential to

use technology to scale operations and consolidate a fragmented

network of stand-alone sites.

"We typically haven't founded companies. Rather, we tend to

acquire them and scale them up," said Ali Satvat, head of Health

Care Strategic Growth at KKR. "But we didn't find a company out

there that served biopharma companies adequately in the clinical

trial site space. So, we saw an opportunity to build a leading

network to address this gap in the market."

THL has been active in pharma services for more than two

decades, with past investments including Syneos Health, PCI

Pharma Services, Adare Pharma Solutions and Red Nucleus.

The transaction marks an exit for private equity firm KKR,

which acquired Headlands in 2018 and is said to have multiplied

its investment, according to a person familiar with the matter.

KKR's exit from Headlands followed its successful divestment

of PRA Health Sciences, a clinical research organization where

it delivered a six-fold return for investors. Icon bought PRA in

2021 for $12 billion.

Recent deals by private equity firms in clinical trials

include BayPine's $1.5 billion acquisition of CenExel, and

Genstar Capital's majority investment in Flourish Research, for

an undisclosed amount.

Headlands operates more than 20 sites and has conducted more

than 5,000 trials in therapeutic areas including central nervous

system disorders, vaccines, and metabolic diseases.

Headlands CEO Kyle Burtnett expects clinical trial

investments to grow at single to upper-single-digit rates over

the next five years.

"It's a very solid growth rate highlighting the strength of

the sector," Burtnett said.

In a joint press release announcing the deal, the companies

said, "The strategic partnership between THL and Headlands will

fuel Headlands' continued expansion, enhance its technology and

centralized infrastructure and further strengthen its ability to

deliver high-quality, diverse clinical trial data for

pharmaceutical and biotech sponsors in support of

Headlands' mission to improve lives by advancing innovative

medical therapies."