Blackstone Buys Japan Drug Trial Firm, Adding to PE Health Deals

Blackstone (NYSE:BX), the world's largest alternative asset manager, has announced its acquisition of a majority stake in I'rom Group Co., Ltd. (TSE:2372), Japan's leading Site Management Organization (SMO) that provides clinical trial management services. This deal is the latest in a series of private equity (PE) investments in the healthcare sector by Blackstone, which has been actively expanding its presence in Japan and globally.



I'rom Group, founded in 1989, has pioneered Japan's SMO market and has since diversified its business to include Contract Research Organization (CRO) services, medical clinic complexes, and advanced medical technology in regenerative medicine. The company's mission is to bring critical medicines and technologies to the market efficiently and quickly, ensuring that new technologies and medicines are brought to patients in a timely manner.

Blackstone's investment in I'rom Group aligns with its broader strategy in the life sciences sector, both in Japan and globally. The firm focuses on high conviction themes and seeks to add value through its deep expertise and network. In Japan, Blackstone has made two marquee investments in the life sciences sector, transforming Alinamin Pharmaceutical into a market leader and investing in AYUMI Pharmaceutical. Globally, Blackstone has built a robust track record in the life sciences sector, including investments in Geo-Young in South Korea and CARE Hospitals in India.



By partnering with I'rom Group, Blackstone aims to support the company's mission of bringing critical medicines and technologies to the market and transforming patients' lives. The firm plans to leverage its deep healthcare expertise and network to help I'rom advance in its next phase of growth. Blackstone also seeks to bring operational improvements and synergies to I'rom, including its scale and operational expertise, synergy across its portfolio, investment in advanced medical technology, and strengthening the CRO business.

Atsuhiko Sakamoto, Head of Private Equity, Blackstone Japan, stated, "We are pleased to partner with Mr. Mori and the rest of the management team, and help advance the company in its next phase of growth. We believe we can add tremendous value with our deep healthcare expertise and network. Life sciences is one of our highest conviction investment themes globally, including in Japan, where we have made two marquee investments and built these businesses into market leaders. We are committed to supporting I'rom's mission of bringing critical medicines and technologies to the market and transforming patients' lives."

Toyotaka Mori, Founder, President & Chief Executive Officer, I'rom Group, added, "We are excited to begin this journey with Blackstone, the world's largest alternative investor. We share the vision of meaningfully growing the I'rom business and providing our medical partners with high-quality clinical trial operations and services, which can ultimately deliver life-changing medicines to patients quickly. We believe Blackstone is a great partner to bring I'rom to the next stage, building up on I'rom's more than a quarter-century of trust, innovation, and security."

Blackstone aims to commence the tender offer by around mid-June 2024, subject to the receipt of certain regulatory approvals and the satisfaction of other conditions set forth in the agreement with Mr. Mori. Pursuant to such agreement, following a successful tender offer and subsequent squeeze-out process, Blackstone will own 55% of I'rom, and Mr. Mori will continue to remain invested with 45% ownership through his asset management company.

This acquisition is a testament to Blackstone's commitment to investing in Japan's healthcare services sector, where it has deep expertise and network. The firm continues to seek out high-growth, high-potential markets and partner with management teams to build market-leading businesses. As the global life sciences sector continues to grow and evolve, Blackstone's investment in I'rom Group positions the firm well to capitalize on emerging opportunities in the market.