Case Study - Guiding an entrepreneur - Optimise4

Optimise4 - Working with an entrepreneur

Client Requirement

This serial entrepreneur always had an eye for a new business. He had been successful in commercial property and sold out in 2007, just before commercial yields collapsed. He sold the Company for several millions and wanted to reinvest in a new direction. He was attracted to the yields in nursing homes and was aware of the increase in our ageing population. He saw an opportunity.

Challenge

Optimise4 was asked to assist the entrepreneur in identifying assets for sale. He liked ma and pa nursing homes but given his building connections wanted to explore new builds. He was open to the idea of building specialist rehabilitation units. He liked the corporate model of an Australian entrepreneur who had built rehabilitation hospitals.

Approach

There are consultants who massage client expectations to secure a fee. The challenge for Optimise4 was to act with integrity without losing the client. The Associate succeeded and was able to rein in the ambitions of the entrepreneur without stifling his dream. The Optimise4 associate was able to demonstrate that the client needed a management team if he was to secure debt capital, and to manage successfully the investment in a market in which he was unfamiliar.

Outcomes

Optimise4 identified a non exec chairman to front the venture. They adopted an outsource model in which day to day clinical management stays with the acquired nursing home while operational and financial control is a bought-in service. Optimise4 put together the outsource team. Acquisitions are targeted for their distressed nature, due diligence undertaken by an industry partner and then financed by bank debt.

Value

The entrepreneur is building a portfolio of 500 beds under management and will sell within 5 years. Homes are turned into profit centres and each home manager is a budget holder. The idea of new builds is on hold.