Surprises are rare in the leaky M&A market down under, but Advent International’s acquisition of New Zealand Clinical Research Group (NZCR), announced last week, was a revelation to many.

Even when this news service got wind of a transaction involving NZCR three weeks ago, multiple sources said they were not aware of a sale process for the Waterman Capital-owned asset. It turns out there was no formal process at all, according to Beau Dixon, managing director and head of Australia and New Zealand at Advent, who led the deal.

“This was a proprietary deal that was identified by the deal team,” he said. “We built a relationship with Waterman Capital, the founder clinicians, and the CEO over a long period of time.”

Waterman acquired a majority stake in NZCR for an undisclosed sum in 2020 after supporting its formation through the merger of Auckland Clinical Studies (ACS) and Christchurch Clinical Studies Trust (CCST). The private equity firm, which invested via its NZD 230m (USD 137m) fourth fund, will retain a significant minority shareholding in the business.

Last year, NZCR acquired CMAX Clinical Research and its subsidiary Fusion Clinical Research, creating what was touted as Australasia’s largest independent, multi-phase clinical research business. This followed the purchase of Optimal Clinical Trials in 2023.

Suitable target

Advent has been following NZCR for more than 18 months, which suggests tracking began shortly after the firm recruited Dixon from Anchorage Capital Partners to open its Sydney office.

The deal, reportedly valued at about AUD 1bn (USD 710m), is the second he has led at Advent. It follows last year’s acquisition of registry and investor administration services provider Automic Group for a reported AUD 725m.

“We were very focused on finding a business that had organic growth vectors available to it, as well as multi-geographic exposure centred around Australia, New Zealand, and Asia,” Dixon said.

NZCR is one of Australia and New Zealand’s largest clinical research site networks with brands including NZCR, CMAX, Optimal and Fusion. It is a physician-led clinical research organisation with more than 35 years of experience covering early and later-phase studies.

Despite not running a sale process, the asset was highly sought after by global strategics and sponsors, according to Dixon. This is largely attributed to growth vectors, including the expansion of a multi-geographic and multi-site footprint, therapeutic area expansion, global customer growth, and further investment in people, systems and processes.

Examined closely, the NZCR deal should not be a big surprise for those familiar with Advent, which has completed more than 55 healthcare investments across 17 countries. Over the last decade, it has invested more than USD 4bn in nine pharma services companies across Asia Pacific, Europe, and the Americas.

As Dixon put it, NZCR “ticks all the boxes” for Advent insofar as it is a highly strategic asset in healthcare – a focus sector – and specifically in pharma services. The firm spent more than nine months preparing to approach NZCR after identifying the business through its global sourcing network.

“We aligned our experience with the value creation plan through detailed market work and pattern recognition drawn from our historic deals and experience,” Dixon said.

Acceleration opportunity

For Justin Mundt, a healthcare-focused director at Advent who led the NZCR deal alongside Dixon, it is not good enough to simply identify great companies.

“We’re always applying that lens of ‘Where do we think we have the ability to create a differentiated outcome?’” he explained, adding that the value creation hypothesis was supported by due diligence findings of “predictable revenue conversion engine and strong customer advocacy.”

Advent sees NZCR as a compelling acceleration opportunity, observing that the business has demonstrated long-term organic growth on the back of consistent demand in Australia and New Zealand. This has in turn been driven by pharmaceuticals innovation in North America, Europe and Asia.

“We believe there is potential for the business to double its current size,” Dixon noted.

Future growth will largely be achieved through organic expansion, with only tactical M&A. Much of the buildout will focus on Asia Pacific, although there are also plans to work more with large biotech and pharma customers in the US. Dixon said that, as well as adding clients, NZCR will look to enhance existing relationships to support a wider array of drug development activities.

Advent expects to close the deal in 4Q26. It comes at a time when multiple Australia and New Zealand-based clinical trial businesses are either in the market or about to start a sale process, including Blackstone’s Nucleus Network and Quadrant Private Equity’s Southern Star Research.