Oasis. BUPA. Round and round until the music stops….

(Apologies for mixed metaphors)

I remember a staple of children’s parties was a game called pass the parcel. In this a present was wrapped in many layers of paper and passed from child to child who were seated in a circle. When the music stopped whoever had the parcel removed a layer of wrapping paper. As the game wore on it became more exciting as to who would be holding the parcel when the last sheet of wrapping was removed.

The present wasn’t always what you wanted. Some parents would wrap cabbages or other vegetables.

The news that Bridgepoint is selling Oasis to BUPA has been rumoured for a couple of months. The price is apparently £835 million. They paid £185 million when they bought it in 2013. They have made serious acquisitions and expansions (including using the fact that they also owned Smiles to further expand into Ireland).

They (BUPA) already have a number of practices which I believe are all private, taking on the conglomerate that is Oasis with lots of NHS practices will be a challenge. I have heard stories of associate dentists having to buy their own materials  and other less than thrilling tales of the pursuit of the UDA target that made me feel it was a “buy, build, expand and sell exercise”. That’s what venture capitalists do.

BUPA is a name that one readily associates with private health care and i wonder if this is the first step into their creating an alternative very large private dental chain. In which case they will have to set about developing a culture of customer service, communication and patient care that many of Oasis practices are sadly lacking at the moment.

That’s a very big ticket for them to repay. As with all these takeovers about which I seem to write 3 or 4 times a year I wish them success because the workforce of dentists and DCPs deserve good management and appreciation and the patients should be able to expect and receive the very best treatment.

It is a myth that any business is too big to fail. I am concerned that this parcel may well reveal itself to have a balloon at its centre. In which case be careful how you tear the paper and sellotape, because, to use a line which I seem to write every couple of weeks at the moment, there’s nothing sadder than a burst balloon. My memory of a lot of children’s parties is them ending with the someone in tears.

This time the balloon could be very big indeed….

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You pays your money and you takes your choice.

Lancaster city centre.

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Bidders Asked To Swallow Oasis Dental Chain. When will the balloon burst?

cartoon illustration of a small fish swimming happily inside the mouth of big fish

Bidders Asked To Swallow Oasis Dental Chain

From SkyNews.
Bridgepoint is preparing to hire bankers to oversee a sale of Oasis, Britain’s second-biggest dentistry provider.The dentistry chain chaired by Lord Rose, the man spearheading the campaign for the UK to remain in the European Union, is preparing to put itself up for sale.
Sky News understands that the owner of Oasis Healthcare, which owns more than 300 practices across the UK, is about to kick off talks with prospective advisers about a formal auction of the business.
A sale will value the business at several hundred million pounds, and is expected to generate a decent return to Bridgepoint, its owner since 2013.
The timing of a process has not yet been finalised, but it is likely to coincide with – or come shortly after – an auction of Southern Dental, a smaller rival to Oasis.
Southern, which was founded by Dr Mazdak Eyrumlu a decade ago has retained Catalyst Corporate Finance, an advisory firm, to sell itself less than two years after an earlier auction was abandoned.
MyDentist, a larger competitor owned by buyout firm Carlyle, has also been exploring a sale or flotation, although it is unclear whether it is likely to change hands this year.
Oasis has been chaired by Lord Rose since shortly after Bridgepoint acquired it for £185m, since when it has announced a number of further bolt-on acquisitions to bolster its size.
In May 2014, it bought Smiles Dental and Apex Dental Care in deals which added more than 110 practices.
Accounts filed at Companies House for the year ended March 31, 2015 showed a 63% rise in turnover to £234m, with pre-tax profit up more than half to £30m.

In his foreword to the accounts, Lord Rose described Oasis as “the only branded group offering a sizeable mix of both NHS and private treatment”.
In addition to Oasis and his role at Britain Stronger in Europe, Lord Rose chairs Ocado, the online grocer, and FatFace, the fashion retailer.
Bridgepoint declined to comment on Monday.Glithead fishe skeleton in the plate from above

Lefsetz on Founders

From The Lefsetz Letter – March 13th. I don’t always agree with what Bob Lefsetz writes but I enjoy what he says and usually the way that he says it.

Founders

Don’t take no for an answer. But when their product is in the marketplace to no acclaim, to little adoption, they pivot.

He who is invested in the present will get lost in the future.

Founders remember when they were broke, what it took to gain traction, managers can do only thus. Which is why Apple is failing under Tim Cook yet burgeoned under Steve Jobs. Jobs remembered working in the garage, hustling… When Steve came back to Apple he was willing to make the big decisions, the big leaps forward, he slimmed the product line, narrowed the focus and went all in on an advertising campaign that satisfied himself, not focus groups. If you’re not willing to leave some people out, you will never succeed. Play to somebody, not everybody. Remember when Jobs famously said he was ceding the enterprise to focus on education? Today education is owned by the Chromebook. You must own something or you own nothing. Right now Apple has a huge footprint in mobile phones, but worldwide iOS is dwarfed by Android. Will the next great leap forward come from Apple? Probably not, probably from another outsider with nothing to lose who has pivoted from failure to success. There is no founder left at Apple, it’s to their detriment. There are no founders left at the major record labels, to their detriment. With the roll-up of live entertainment scrappy founders have been eviscerated, centralized buying might do well for the bottom line today, but hampers you in the future, there’s no one with their ear to the ground taking chances locally, and concert promotion will always be a local business.

Founders are not hampered by their education. The reason so many successful entrepreneurs never finished college is because college too often puts you in a box, tells you how to think, emphasizes no instead of yes.

Continues here

Does this apply to (some) dental corporates?

I read the obituary of Sir Adrian Cadbury in the weekend FT. After a distinguished career as an athlete, businessman and administrator he has died aged 86. Long after he left the firm, that was named after his ancestor John Cadbury, the company was controversially taken over by Kraft in 2009. He and his younger brother, Dominic, wrote to the Daily Telegraph about the proposed merger saying,

“A bidder can buy a business. What they cannot acquire is legitimacy over the character, values, experience and traditions on which that business was founded and flourished.”

There’s more to business than shareholder value and I’m not the only one who thinks so.

Food for thought.

Barry Cockcroft joins IDH – caption competition…

The ex-Chief Dental Officer of England Barry Cockcroft is to join the UK’s largest corporate chain of dental practices, IDH – so recently cunningly re-branded as “MyDentist”.

Any suggestions as to what Bazza was saying here?

 

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Is the bubble just getting bigger? “IDH opens wide for £1bn autumn stock market float”

From The Telegraph online 3oth May.

Dentist chain IDH opens wide for £1bn autumn stock market float
Stock market listing of Integrated Dental Holdings will see senior managers at the UK’s biggest dentist chain collect a £150m windfall.

Europe’s biggest dentist chain has revived plans for a £1bn London stock market float after overcoming fears about the outcome of the general election.
A listing of Integrated Dental Holdings (IDH), which has over 600 practices across England, Scotland and Wales, will spell a £150m pay-day for the company’s senior managers, who own a 15.5pc stake in the company.
IDH is currently majority owned by Carlyle, one of the world’s largest private equity firms.
The dentist chain is the largest provider of public dental care in the UK, with around 85pc of revenues generated from NHS patients. However, the latest accounts filed by the group’s parent company, Turnstone Equity, reveals that IDH is gradually increasing sales from its private and specialist dentistry practice.
IDH, which employs over 3,370 dentists and nurses, made £346m of sales from the NHS and £54m from the private sector. Total pre-tax profits were £18.1m.

IDH was founded in 1996 by Luke Johnson, the Pizza Express entrepreneur and Patisserie Valerie owner. He sold the business in 2006 for just over £100m to the private equity arm of Merrill Lynch.
Carlyle then bought a majority stake in IDH and merged it with Pamplona Capital Partners’s rival dentist firm, Associated Dental Practices, in a £600m deal in 2011.
It is understood that Carlyle which owns just under 65pc and Pamplona, which owns around 20pc, has also held conversations with other private equity buyers about a sale, but these failed to reach an agreement on price. Sources said that a listing is now their preferred option and they have told bankers at Goldman Sachs and Credit Suisse to float the business in the autumn.
The group first confirmed that it was considering a stock market listing in June last year.
Float candidates are currently weighing whether to rush through a listing before the summer break or wait until the City returns to work in September.

Cyber security firm Sophos and leisure parks operator CenterParcs are also said to be considering the timing of their billion pound listings. Industry bankers caution that as seen in other examples of RAC, Travelex or Virgin Active, private equity firms looking to exit businesses will also gladly take knock-out offers for their porfolio companies.

Here are some financials from the holding company Turnstone Equity

 

 

 

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