After the ASX-listed company he founded was offered a $251.5 million takeover deal in late 2019, then National Veterinary Care (NVC) CEO Tomas Steenackers already had the wheels in motion to replicate the business model in eye care. A few months later COVID-19 put the brakes on the new venture, but now his company National Optical Care (NOC) has 14 practices to its name and is on the cusp of launching management services for independents nationwide.
As profits rise despite an acquisition-heavy business model, brand recognition gathers steam, and more external would-be competitors are more than happy to enlist your company's specialist services to improve their operations, it is only natural you'd start to wonder where else you could be of use.
This was the position Tomas Steenackers (pictured) found himself in at National Vet Care in 2019. He had just won the Australian Young Entrepreneur of the Year Award in late 2018, and the group he ran was on a steady growth trajectory.
"I was looking at having another two or three years as CEO, and then probably stepping back from the board of NVC while mentoring the next CEO," Steenackers tells Business News Australia.
Over six months the executive planned the concept for a new optometry roll-up in his spare time, drawing on the same fundamentals as the veterinary business.
"The difference of our model is most of the players out there are considered retail companies and are leading with eyewear, whereas we're focused on positioning as an eye-care company," Steenackers says.
"It's similar to what I did with NVC. If you look at other competitors in the vet space it was about how quickly can you sell a bag of pet food, but for us it was about how we can educate the client, and what preventative and proactive actions they can take for the health and wellbeing of their pets.
"It's the same in eye care. There's an educational process and patients need to be proactive about their eye care over time."
In the case of NVC, Steenackers highlights several core principles that were finetuned over the course of 5.5 years: owning your own clinics, not dictating the brand, respecting the work that professionals have done in their clinics, upskilling and adding value.
"At NVC in the end we had between 600 and 650 independents using our services, and it could be as simple as procurement services, marketing or IT benchmarking; we offered consulting services to help support businesses better.
"That concept applies perfectly to NOC, and that's what the team is trying to replicate."
With these ideas in mind, in mid-2019 Steenackers raised seed funding for NOC and brought together a small management team with former Godfrey's CEO Jason Gowie at the helm.
"I created National Optical Care in July 2019. I raised $1 million to get us going with the management team that we needed, and to cover all the legal and accounting expenses so that we'd be in a position to sign sales agreements with potential practices that wanted to sell.
"That's what the CEO did from July 2019 to January 2020, negotiating with practices and putting them on contract."
By the time 2020 began Steenackers knew he'd have more time for the fresh project, having reached a deal to sell NVC which was to be completed in April, and no need to stay on as CEO given it would be merged into VetPartners.
The idea was to raise funds for acquisitions, either through a private equity partnership or an initial public offering (IPO), but the pandemic threw those plans into disarray.
"We were ready to go but then COVID hit and everything went pretty silent as you can imagine," says Steenackers.
"Our CEO Jason Gowie had all those practices ready to go, we were at the stage of getting all the funding done to buy all those practices, but because everything was on hold with COVID, with private equity or the stock market it was almost impossible to get funding for any projects."
It was an uncertain state of affairs that sent Steenackers into survival mode to avoid burning all the cash that had been raised.
"We took a bit of a different strategy to minimise costs as much as possible for the following months, and then in November 2020 we were able to restart and get the funding that we needed to basically execute those agreements and buy those practices," he says.
Calling up the old guard
Steenackers was able to raise $6 million from a mix of investors who had been involved in the NVC journey or had faith in his abilities, giving a supporting bank the confidence to provide the balance of funds needed to acquire the clinics, whose combined annual revenue is around $20 million.
In October he had brought Janita Robba - a former NVC company secretary as well as acquisitions and commercial manager - on board as CFO and company secretary, followed by the recruitment of Paula Sadler, NVC's former marketing and managed services GM, into the same role at NOC.
But the missing piece of the puzzle for Steenackers was optometry industry experience, so in November NOC announced an alliance with Sydney-based EyeQ Optometrists - which has 26 sites - as an unbranded franchise associate group.
"We know how to build a business. I think the model I built for NVC was quite efficient and high performing, but we didn't have all the expertise from the optometry side of things so the idea was to partner with another company that had those skills sets.
"EyeQ is a business that was founded by optometrists, and now we're working together to leverage our expertise."
Steenackers has set the goal for NOC to service between 100 and 200 independent practices from the company's new managed services division within the next 12 to 18 months.
"It comes back to adding value to those independents that are not big enough to have access to all the services available to a corporate," Steenackers says, slating plans to launch the group in March.
He says the company will be brand-neutral with practices able to keep their old names, but if independents choose, they can also go down the path of utilising NOC's services and signing up to the EyeQ franchise.
But will all this lead to another IPO for the health-preneur?
"It will depend on the market condition. I never say no to an IPO - we did all right at NVC. I think the financial market is going to be really interesting over the next 12 months or so," he replies.
"The goal here is to set up a business that has a really good foundation with a good culture with the right standards of care, and putting the right systems in place to permit a really aggressive growth in the next 12 months.
"When we're ready to go at that point it'll be a question of where we can get funding. Is it an IPO or is it a private equity partner that comes into play? Time will have to tell."
Business News Australia
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