Riverside snaps up Avance stake, joins hot clinical trials sector

Adelaide’s Avance Clinical is joining the avalanche of contract research sector deals, selling a significant stake in the business to global growth private equity firm The Riverside Company.

Avance Clinical sells clinical research services to local and international biopharma companies. It pitches itself as the largest premium Australian CRO (contract research organisation) for international biotechs, and can deliver data for reviews by US Food and Drug Administration and the European Medicines Agency.

Private equity investors are rushing to the clinical trials sector, making the most of work available for Australian providers.

It employs more than 160 specialist clinical staff, and has expanded its clinical trials business to include vaccines and GMO (genetically modified organism) therapies after getting accreditation as a gene technology CRO under the Office of the Gene Technology Regulator.

Its owners called in advisory firm Allier Capital to explore options and ended up signing a deal with Riverside, which invests in Australia via a specialist team in Melbourne. Lazard Australia advised Riverside.

Riverside’s stake will allow Avance to ramp up its clinical trials business, the company said.

Avance has been around for 24 years and has completed over 195 studies with 10,000 plus participants. It promises full-service CRO and a five week start-up time, with the sweet tailwind of 43.5 per cent rebates for biopharma companies on eligible clinical trial spending under the government’s research and development grants.

The transaction’s terms were not disclosed.

The Riverside Company is a 33-year-old private equity firm, which focuses on investing in growing businesses valued at less than US$400 million ($540 million). Its Australian team has done well in health and allied health services businesses, and owns medical and homecare equipment company Independent Living Specialists and occupational rehab group Altius.

The deal is the latest in a string of clinical trials transactions.

In August, Australian medical research house Burnet Institute secured a $300 million-odd payday for its clinical research testing spin-off 360biolabs, offloading its 75 per cent stake to PE-backed US testing business BioAgilytix.

In October. PE giant Blackstone picked up local PE firm Crescent Capital’s stake in Nucleus Network from Australian private equity firm Crescent Capital. The 15-year-old Nucleus is understood to have been a $40 million a year business in EBITDA terms.

TPG Capital is also exploring private funding options for Asian bigwig Novotech, which started in Australia and was formerly owned by Mercury Capital.

If recent deal activity in the last three months is anything to go by, expect more clinical trial deals in the new year.