CHICAGO -- Water Street Healthcare Partners, a private equity firm focused on the health care industry, acquired the Pharmaceutical Development division from AAIPharma Inc.

Water Street has committed up to $75 million in equity financing to expand the business' capabilities. The new company is named AAIPharma Services Corp.

The company's headquarters will remain in Wilmington, N.C. Its areas of expertise include analytical chemistry, formulation development, clinical packaging, oral drug delivery, and contract manufacturing.

"In addition to providing significant capital resources, Water Street offers extensive pharmaceutical expertise that will benefit our company, employees, and customers as we embark on a new strategic course," said L. Lee Karras, who has been appointed CEO.