TPG Sells More Than 10% of Novotech to Investors Ahead of IPO

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Private equity firmTPG is selling more than 10% of its clinical research and testing providerNovotech Pty Ltd to a group of investors.

The transaction will value Novotech at more than $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% 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,” 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 U.S. and Europe. To be able to offer clinical testing services to health-care companies in the U.S. and Europe was a big opportunity for the firm.

TPG also helped Novotech expand overseas. The company operates in 12 countries, with 70% of its revenue generated outside of Australia, compared with just 30% three years ago. It’s among the largest biotechnology contract research businesses across China, Southeast Asia, Taiwan and South Korea, which together make up a number of the fastest-growing markets for clinical trials.

Anand Tharmaratnam will take over from Thickins as chairman of the company in April, the companysaid last month.

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