TPG sells more than 10% of Novotech to investors

Sydney

PRIVATE equity firm TPG is selling more than 10 per cent of its clinical research and testing provider Novotech Pty Ltd to a group of investors.

The transaction will value Novotech at more than US$2.3 billion as the company prepares for an initial public offering in Hong Kong later this year, said Joel Thickins, head of Australia and New Zealand for TPG Capital Asia. He is also chairman of Novotech.

The valuation makes the company one of the most successful investments for the private equity group in Asia, he said. The Sydney-based firm has increased revenues by more than 30 per cent a year under TPG's ownership since 2017, most recently helping with clinical trials for Covid-19 vaccines, as well as cancer and hepatitis drugs.

"Novotech is a platform asset for us in Asia and a testament to the sector-led strategy we have pursued in differentiating ourselves from other sponsors," Mr Thickins said in an interview.

He said TPG decided to invest in the clinical research industry in Asia in 2015 on intensifying investor demand for biotech companies and because the region's populations were relatively untested in clinical trials compared with the US and Europe. To be able to offer clinical testing services to healthcare companies in the US and Europe was a big opportunity for the firm.

TPG also helped Novotech expand overseas. The company operates in 12 countries, with 70 per cent of its revenue generated outside of Australia, compared with just 30 per cent three years ago. BLOOMBERG