I’m seeing astounding levels of interest in my Overnight Multiple Merger Model (OMMM), following extensive press coverage of the highly lucrative private equity sale to Exponent of my first OMMM, Xeinadin. So much so, that I forecast £5bn investment based on the number of businesses and the level of interest shown by leading Private Equity firms to date.
I dreamt up the OMMM back in 2018 as a way to consolidate large numbers of individual companies in record time, in order to drive up standards and profits in saturated industries such as pharmacy and accountancy. They are low-risk, and offer high PAT (profit after tax).
Xeinadin, my first OMMM, was created through a merger of 122 independent accountancy firms in just 256 working days, to lawfully consolidate and launch at the stroke of midnight, on 1st June 2019. Xeinadin immediately became a leading accountancy firm; and went on to post revenues in May 2020 of £110.3million, and earnings before interest tax depreciation and amortisation (asset repayments) of £39.9million, a figure far higher than that typically seen in the sector. This type of growth usually takes 50 to 100 years to achieve.
Furthermore, as we saw above, Xeinadin have now commanded an extremely valuable chunk of private investment.
Although this 256 working-day venture was incredibly demanding (there wasn’t much sleep to be had towards the end), I realised in the process that this model was fully replicable. So in 2019 I founded my second OMMM, the pioneering 100+ store pharmacy group Alitam.
This OMMM involved a multi-million pound consolidation of over 100 stores, with an aspiration to build a FTSE100 company within five years. Already Alitam is reporting a projected £8m of savings to date, achieved through streamlining overheads; shared software licenses and regulation costs; insurance savings; creation of own-brand Alitam products; and a cohesive marketing, promotion and recruitment strategy among others.
The scale of the operation is allowing us to put our ‘Pharmacy of the Future’ vision into practice, at pace. Utilising the existing pharmacy infrastructure and clinical skills of pharmacists to transform our struggling healthcare system into one focused on prevention. Thereby improving the health and wellbeing of everyone.
So, two sizeable firms in two saturated sectors, who seemingly came from nowhere to change the paradigm and offer a brave new way of doing things; increasing profits as surely as they raise standards. What was unthinkable ten years ago in accountancy is now the norm. Pharmacy and the healthcare landscape are set to be radically overhauled.
Clearly, the OMMM is streets ahead of many business models, and allows for a level of innovation and cross-fertilisation not possible with, say, a franchise protoype. The OMMM delivers high profits from the start, has minimal set-up costs and has no debt on consolidation. And it offers outstanding returns: on entering consolidation, the OMMM is able to double or treble the value of all business subsidiaries as they form a large platform in a saturated market.
Highly skilled operators run the business from the start, and there’s an inbuilt community too, which fosters vital peer-to-peer learning, cross-fertilisation of ideas and speedy implementation of new technology and service lines.
Franchisees, on the other hand, are often start-ups with no profit – or, worse, they’re already in debt. They’re likely to need a Head Office earlier on, incurring significantly higher costs than an OMMM. And, while a franchisee entering their model starts to plan for value, this can take many years to build.
Crucially, they’re unlikely to liaise with other franchisees regularly. They’re usually guided by Head Office who cannot pass on important know-how. They cannot benefit from the business benefits of community, or the knowledge bank built by peers, which is the lifeblood of the OMMM.
Small wonder that large investment houses are showing serious interest in the OMMM. I will be making further announcements very soon.