By Dan Primack
February 25, 2014

FORTUNE — European private equity firm Cinven today announced that it will acquire Medpace, a Cincinnati-based clinical research organization for biotech and pharma companies, for approximately $915 million from CCMP Capital Advisors. Cinven has been circling this space for a while, having lost out last year on PRA International to Kohlberg Kravis Roberts & Co. (KKR). Today’s deal also was competitive, with Cinven besting GTCR and Summit Partners.

We spent some time on the phone with Alex Leslie, a healthcare-focused principal at Cinven, to better understand the firm’s investment. What follows is an edited transcript.

FORTUNE: What’s your basic investment thesis behind paying $915 million for Medpace?

Alex Leslie: We’ve been looking at the CRO industry for a number of months, because we believe that investing in CRO’s serving small and mid-sized pharma and biotech companies is a good place to be. The outlook is that R&D spending at that part of the market is more positive than it is for larger pharma or biotech companies. What we then want to do is make sure that the business we’ve invested in wins share. That means expanding its international capability and also its areas of therapeutic expertise.

Up until a company of years ago Medpace was almost entirely in the U.S. It’s since grown into Europe, and we want to help grow it there and beyond. We’d also like to help the company expand beyond its core therapeutic areas of cardiovascular into things like oncology, CNS and antivirus.

Given that Medpace provides outsourced services, why does it matter if its offices are in Cincinnati or London or Shanghai?

Clinical trials, particularly Phase 3, are almost always global in nature. Finding patients is difficult so you search everywhere for them. So pharma companies want to use a one-stop shop who can provide on-the-ground capabilities wherever they need to go.

Why don’t you believe big pharma R&D spend will rise going forward?

One reason is that the returns on R&D spend for big pharma have continues to disappoint the market. Big pharma is spending a huge amount of time trying to analyze why that is, and they often make up for it by buying smaller companies that seem, by nature of their size, to be more nimble and producing better quality molecules.

Do you view this as a platform for which you’ll make several bolt-on acquisitions?

That’s not part of the base case plan. We believe this investment will be good even without it, but there are some bolt-ons we’d consider if they’d accelerate growth. For example, if we could get more scale in Eastern Europe by a small bolt-on we’d consider it. Similarly is it would enhance our expertise in a particular therapeutic area. We’re a little wary of doing large-scale M&A in this market, because these are very people-intensive businesses with sensitive cultures. Big M&A can create an awkward misfit.

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