TPG-owned clinical trials player raises new equity, debt

The company, which was said to be targeting a Hong Kong IPO, completed a USD 255m private placement with participation from global institutional investors, sovereign wealth funds, and specialist healthcare investors. All the existing backers re-upped, including TPG, which remains the controlling shareholder.

“Notwithstanding the volatile market environment, particularly across public capital markets in Asia during the fourth quarter of 2021, the company successfully attained a robust valuation step-up in this transaction as compared to the valuation following the previous private placement transaction that was completed in February 2021,” Novotech said in a statement.

The previous private placement reportedly saw a 10% stake sold at a valuation of more than USD 2.3bn.

The latest transaction was accompanied by a USD 505m refinancing. TPG acquired Novotech from Mercury Capital in 2017 at a valuation of USD 300m (USD 217m). It secured approximately AUD 123m in unitranche funding, plus an AUD 30m revolving credit facility, Debtwire, AVCJ’s sister title, reported. An AUD 300m refinancing – with a dividend recap – was completed in 2020.

Novotech was established in Australia but has expanded throughout Asia. It now has 14 offices across the region as well as a presence in North America. In 2020, the company acquired China-based PPC Group, creating what it claims is the largest biotech specialist clinical research organisation (CRO) in Asia able to deliver full clinical services, from first in-human to phase four.

Since its inception, Novotech has facilitated approximately 3,700 clinical trials across a wide range of therapeutic areas. In 2021, its revenue backlog grew 35%, while net new business increased by 30%, rising to 60% in China alone.

Novotech has been instrumental in developing the China-Australia corridor. With Chinese biotech players increasingly wanting to go global, Australia has emerged as an attractive location for international clinical trials, with substantial research talent and infrastructure, high scientific standards, and strong intellectual property protection.

The new funding will support further geographical expansion through M&A and the enhancement of data, artificial intelligence, and technology-enabled offerings.

Australia’s CRO space has proved fertile ground for private equity in recent months. The Blackstone Group bought Nucleus Network for a reported AUD 600m in November, facilitating an exit for Crescent Capital Partners. This was followed by The Riverside Company’s acquisition of Avance Clinical.

UBS served as sole financial advisor to Novotech and TPG on the private placement.

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• Topics
• Australasia
• Southeast Asia
• Greater China
• Healthcare
• Expansion
• Financing
• Asia
• Australia
• TPG Capital
• Pharmaceuticals
• Leveraged finance
• Growth capital