Optimo pair look to buy and build

THE owners of a domiciliary care business based at Crosby on Merseyside are in talks with venture capitalists about funding for their second ‘buy and build’ venture in the sector.

Richard Walker, chief executive of Optimo Care, has teamed up with his former boss Mark Hales –  also an investor in TheBusinessDesk.com – in a bid to service what they believe will be a growing market for domiciliary care.

The company has already made its first two acquisitions – purchasing Warren Care in Crosby and TLC of Barnsley – since establishing Optimo Care just under a year ago and is set for a turnover of over £5m by the end of its first year.

“We expect to see others,” said Walker. Its focus will be on acquiring smaller, privately-owned domiciliary care businesses in the North West, Yorkshire and Midlands regions and overlaying a structure that will allow it to offer better training, purchasing power and other advantages that come with building a business of a suitable scale.

Walker said that the aim is to create a “strong, focussed and appropriate” service delivered largely in the north of England. “We have no desire to become a national player.”

He cites figures provided by industry analyst L&B which shows that the demographic market of people requiring care will increase from 10m in 2009 to 12m in 2020 and 17m by 2035.

Moreover, he said the domiciliary care business is a highly fragmented market, with more than 4,900 registered providers. Independent companies take in around £4.5bn of the current market share of £5.1bn.

Optimo Care offers domiciliary care services for the elderly and adults with disabilities as well as providing home-based respite care.

Walker said that it is investing heavily in devising suitable training programmes for staff in a bid to differentiate itself from competitors. He said such training also demonstrates professionalism to local authorities and healthcare organisations that are moving away from proscriptive and costly residential care towards offering “personalised” budgets to patients.

“There is a high demand for these services, but they’re not being delivered very well,” he said.

The key is to do it properly. If you get it right from the start, it means that you can keep hold of your best staff. People enjoy training and learning about what they do.”

Walker, pictured,  first founded his own domiciliary care business in Kirklees in the early 1990s and grew it to employing 115 staff serving three local authority areas before selling to Hales’s Claimar Care business in 2004.

“At the time, Mark was just establishing the business and it had four or five branches in the UK.”

Walker became involved in helping Hales find acquisition targets as they embarked on a buy-and-build which saw them acquire more than 30 businesses. Claimar Care then floated on AIM in 2006 raising £23m for acquisitions. It was eventually bought by competitor Housing21 in 2009 for £40m, which included the assupmtion of £21m of debt.

The pair launched Optimo Care last year after Walker quit Housing21. Hales is chairman and majority shareholder and Walker is CEO.

“Mark has already built one business and has no intention of taking on day-to-day control of this business,” said Walker.

He said that any external investment which it may subsequently take on will be done so with the view of making longterm gains.

“We’re obviously known to the private equity community because of our past experience, but this is not about getting a business and trying to financially engineer a profit in three months. We’re trying to create something over a longer term that will deliver a genuinely good service.”

Following its recent acquisitions, the firm now employs around 400 care staff and has a 13-strong management team.

Its strategy for the current year – alongside making new acquisitions – is to overhaul its web presence, improve awareness of its services through better marketing and develop more specialist service lines for patients with stroke and dementia.

“Utlimately, I see well-trained workers as being key to this business,” he said.