Two leading private equity firms, EQT and Bain Capital, are competing to acquire Blackstone’s Australian clinical trials business, Nucleus Networks, in a sale process managed by Goldman Sachs. The business, valued at over A$1 billion, is currently in its second round of bidding, with Blackstone reportedly seeking a price around 20 times earnings.
Blackstone acquired Nucleus Networks in 2021 from Crescent Capital for approximately A$700 million. At that time, the business was generating about A$35 million in earnings before interest, taxes, depreciation, and amortization (EBITDA). Since then, earnings have doubled to more than A$70 million, positioning Nucleus Networks as a significant player in the Australian market. The company is known as the country’s largest provider of phase one clinical trials, operating facilities in Melbourne and Brisbane, and has recently expanded into the UK following its acquisition of Hammersmith Medicines Research.
EQT, a Swedish private equity fund that raised a record US$22.9 billion for its Asia Pacific private equity fund this year, is being advised by Bank of America in this transaction. The group has been actively deploying capital in the region, including a A$2.2 billion bid for asset manager Perpetual, and due diligence on the A$7 billion takeover of waste management company Cleanaway. EQT owns several healthcare-related assets, such as contract research organization Parexel, acquired alongside Goldman Sachs in 2021 for US$8.5 billion, Australia’s largest integrated cancer care provider Icon Group, and Swedish biotech company Mabtech.
Bain Capital, which closed its Asia Fund VI at US$10.5 billion in May, is also competing for Nucleus Networks. The firm previously acquired Perpetual’s wealth management arm and sold its aged care business, Ezi Stoss, to Stonepeak for US$2.5 billion. Bain Capital is no stranger to the Australian healthcare sector, and its recent efforts to invest heavily in the region reflect its substantial available capital.
The clinical trials sector in Australia has drawn increased interest from private equity over recent years. EQT and Bain Capital had both previously shown interest in Novotech, another clinical research organization, before Singaporean sovereign wealth funds GIC and Temasek took a stake in that business last year.
In a related deal, Healuis’s Agilex Biolab, a smaller clinical trials company valued around A$150 million, is also on the market, with Crescent Capital and Genesis Capital reportedly among the potential buyers. Meanwhile, other notable transactions in the healthcare and related sectors include Radiology Partners’ recent agreement to acquire Everlight Radiology, a diagnostic imaging company operating in Australia and the UK valued at around A$1 billion.
The sale of Nucleus Networks comes amid ongoing consolidation and investment activity in Australia’s healthcare and infrastructure sectors. For example, Brookfield Infrastructure is currently bidding approximately A$7 billion for Cleanaway, while AustralianSuper continues to increase its stake in plumbing fixtures manufacturer Reliance Worldwide, potentially influencing future stake sales in that company.
As the bidding for Nucleus Networks advances, the high earnings multiple sought by Blackstone remains a key point of consideration for prospective buyers amid robust competition and significant dry powder among private equity firms.