The dynamic growth of Centric Health over the last few years is particularly impressive. This highly diversified healthcare company has had a significant string of acquisitions that are aligned to help achieve a strategic vision. A unique presence in the Canadian market, Centric Health is paving the way for a future era of healthcare reform. This month, we spoke to President and CEO Daniel Carriere about how Centric Health is achieving its success as Canada’s premiere healthcare company.
Centric Health is a publicly traded company and has a business model focused on the strategic acquisitions of healthcare companies. Its current market cap is $225 million to $270 million, on a pro forma basis, and Carriere predicts hitting revenues in excess of $300 million—a significant growth since inception. How does Carriere account for its success? “I think it’s our focus and our vision as a Canadian corporation, which is to become Canada’s premiere healthcare services company that provides innovative solutions that focus on patients first.”
The vision was initially developed by Dr. Jack Shevel, founder of NetCare, a South African company he built into one of the leading private health care companies in the world. Dr. Shevel and his team at Global Health Investment Solutions are principle investors in Centric Health and serve as strategic advisors to Carriere and the Centric Management Team.
Beneficial business model
The business model has a benefit for both healthcare providers, as well as patients. By acquiring companies that are truly ‘best in breed’, Centric Health is able to provide its customers with exceptional health care options. “Our approach is to really look at companies who are the absolute best at what they do,” Carriere explains. “We want to work with those people who have extremely high patient care expectations, and also very high ethical standards.”
“We focus on top line and bottom line, ensuring that we have a value-added component that we can offer companies, which is our expertise in other areas such as Finance and Human Resources.We have that critical mass to offer so that those companies can focus less on administrative and financial tasks and more on patient care. We are focused on creating ongoing efficiencies. It’s good for the patients and good for business.”
Rapid growth, major acquisitions
The Centric Health plan is to grow rapidly through acquisitions, which it has been doing at a considerable pace during the last few years. In January, Centric Health added Surgical Spaces, which is a surgical company based in Vancouver and Winnipeg. In May, it added Lifemark Health, which focuses on medical assistance and elder care, marking a key moment in the company’s history. “That was a transformational acquisition and a turning point for the company,” says Carriere.
Since that time, Centric Health also acquired a surgical company called Bluewater Surgical with locations in Sarnia, London, and Windsor, Ont. It acquired a speciality pharmacy operation with 33 locations across Ontario, focused specifically on methadone clinics. An orthotics company, Performance Medical Group, fits in with the focus of elder care, physiotherapy, and rehabilitation. And just a week prior to this interview, it was announced that Centric Health had acquired MIC, a large diagnostic company with 16 locations across the Greater Toronto Area.
Centric Health is well-diversified across Canada. For example, with its acquisition of Lifemark, it has 104 clinics across the country. “These are just some of the examples that indicate how our growth focus will help us move forward,” Carriere explains. It has been an aggressive growth strategy, but a successful one. “We want to complete one major acquisition every quarter and we have been on track with that.” Centric Health plans to match that goal will many other minor acquisitions that complement the overall strategy of providing better healthcare.
“But we are not just a roll up company!” says Carriere, who has created a business development unit to deal with Mergers and Acquisition activity, and also to look at the integration expectations surrounding strategic acquisitions. “If we can’t integrate all of the components, we can’t create a seamless model of care. We want to maximize top line growth and efficiencies derived from the new partnerships.”
For the future, Centric Health will continue to move forward with its acquisition strategy, focusing on its current pillars of care including rehabilitation and physiotherapy, eldercare, medical assessment, surgery, diagnostics, pharma, homecare and home health. Centric Health already has a large market share in the elder care business, covering about 449 homes and 45,000 beds across Canada, but is looking to move beyond that and increase its size and scope within the homecare business. “We think that there is going to be a tremendous focus on homecare for the elderly, and keeping them out of the most expensive part of care which is hospitals.”
Centric Health also has a firm idea of where it stands in the market. “We don’t want to compete against a Shoppers Drug Mart,” says Carriere. “We’re focused on a niche market in regards to pharmaceuticals such as delivering medications to elderly people and nursing homes, and we’re looking at repeat medications that are prescribed on a regular basis, and making sure our drug distribution service is the safest and most efficient in the country.”
Innovative strategies such as this are sure to take Centric Health and its investors into a successful and profitable era. “We expect in two to three years we’ll be a $2 billion market cap company,” Carriere notes. An ambitious goal considering the current market cap of $225 million, but he is completely confident of success.
“Our investors have placed their trust in us and we have given them a return highlighting a compounded annual growth of more than 20 per cent.”