Premier Diversified Holdings Inc.
Premier Diversified Holdings Inc. began in 2009 as a medical diagnostic company called Premier Diagnostic Health Services. In 2014, when the company needed capital, Sanjeev Parsad, who also manages a private equity firm called Corner Market Capital with his partner Alnesh Mohan, decided to inject capital into the distressed business. In April 2015, the corporate structure was converted into investments and holdings, and its name was changed to Premier Diversified Holdings (PDH).
“The reason we did that is because previously we were limited to investing capital into the medical diagnostic industry, and our goal long-term is to provide exceptional returns to our shareholders regardless of which industries we engage in,” President and CEO Sanjeev Parsad tells The Canadian Business Journal.
The Burnaby, British Columbia based holding company is still in its early stages, as this is their first full year of operation. However, after the turnaround, the company is now ready to actively pursue growth through acquisition. PDH offers business, funding and turnaround expertise, through quality management and execution.
Contributions to the private medical industry
PDH has notable subsidiaries in the medical industry. One of them, Premier Diagnostic Center, is the only private PET/CT clinic in western Canada. PET, or Positron Emission Tomography, is a nuclear medicine imaging method used for early diagnosis of cancer and its treatment management. CT, or Computed Tomography, is a method of obtaining anatomically precise images. Premier Diagnostic Center combines these technologies for diagnoses and superior treatment monitoring.
Another of PDH’s subsidiaries is Premier Diagnostic Hong Kong, and underneath that is an MRI clinic in Beijing—a joint venture with a Beijing police military hospital. The MRI clinic was founded by Premier Diagnostic Center’s former CEO Denis Tusar, and began scanning in 2010.
“Our goal is to expand that business. We plan on opening anywhere from two to four more clinics in joint ventures over the next two years,” Parsad tells us. “It’s a fantastic business. China is a superpower economy. We’re in fairly early, and we plan on being in China long-term growing our business.”
Geoff Waters, President and Clinic Director of Premier Diagnostic Center, discusses how the capital injection has helped the private clinic turn around.
“While cooperation in private and public healthcare is moving forward and improving patient outcomes, in Canada perceptions of private medicine remain a challenge. With the newest and updated equipment and maintenance contracts in place, we can now focus on our dependability, quality, and experience, imperative to success in medicine. We have an excellent staff with extensive international experience and as well we are partnering with leading local medical professionals. These developments have established new confidence in Premier for the medical community and secured a prominent place in the Canadian Nuclear Diagnostics community. Premier has now begun scanning participants in two significant world-wide Alzheimer’s disease clinical trials after inspection, certification and accreditation by major international drug makers. Our validation speaks to the quality of our staff and our ability to integrate into the community as a reliable resource.”
“There is much excitement in the medical community now as new drugs are showing very promising results for Alzheimer’s patients in preliminary trials. We are the only site in Western Canada actively taking patients and the only one in Canada for one of the trials,” Waters says.
Supporting other unique industries
Although PDH has businesses in the healthcare industry and certainly plans to expand its reach there, Parsad and his team are also looking to other industries as well.
One such example is in the reinsurance business. With PDH’s capital support as a key investor, entrepreneur Guy Cloutier launched Sequant Reinsurance Company Limited, a Bermuda based Class 3 reinsurance company with a unique business model.
Sequant Re offers insurance-linked securities (ILS), an alternative asset class that allows reinsurers to transfer natural catastrophe and other risks to capital markets, while providing investors with an attractive income stream and diversification of assets. Low correlation to other asset classes and financial markets in general is an important benefit of ILS, because neither the state of the economy, nor the behavior of financial markets has any bearing on the occurrence of natural disasters.
“There has been a market change in the reinsurance business whereby now investors can invest directly into portfolios of reinsurance transactions rather than investing in the stock of reinsurance companies. ILS is experiencing strong growth due to the large influx of capital from large institutional investors who have realized the unique benefits of this asset class. I created Sequant Re to lower barriers to entry and make this investment opportunity accessible to any investor regardless of size. We completed the financing of the holding company in December 2014. Since then, I put together my team including a top tier group of service providers. We have been very busy developing the company. We currently have a mandate for $20 million in assets under management and have presented our offering to a few large institutional investors in various markets,” Cloutier explains.
The new boutique reinsurer is experiencing impressive growth and penetrating markets in Europe and Australasia.
“We are currently raising capital for our first large private placement of up to 150 million USD, which we are aiming to complete within the next couple of months,” Cloutier elaborates.
In addition to investing in Sequant Re, PDH representatives also recently joined the board of Russell Breweries Inc. as its largest shareholder, and have also made a small investment into real estate development company Kingswood Asset Management.
“We look for businesses that have the potential to generate steady future cash flows. Based on assumptions about those cash flows, we come to a valuation for the business and decide what we’re willing to pay. No industry is out of our realm, but we stick to areas where we can value the business based on cash flow or on the underlying assets,” Parsad says.
Off to a positive start
PDH is a new company, but it has already proven its ability to effectively turnaround a business, as both PDH itself and its subsidiary, Premier Diagnostic Center were once distressed businesses. Parsad believes what sets PDH apart is its unique corporate culture and ability to recognize the long-term value of businesses.
“We take a very long-term view on our businesses and investments, and we tried to create a very unique culture with how we operate from the top down. I am completely accountable in terms of compensation and how we behave. Our employees from our VPs to the presidents of subsidiary companies all handle themselves that way. We believe if you conduct yourself in an ethical manner, you’ll have success over the long term. And if you’re honest with your shareholders and put them first, your company will grow and retain a strong shareholder base over time,” he states.
Presidents and owners of companies that PDH has helped in the past, including their subsidiary Premier Diagnostic Center and the reinsurer Sequant Re, appreciate this unique outlook and approach to conducting business.
“PDH’s management has allowed us to move forward with our vision confidently and engage the medical community in a way that is unique in the Canadian private healthcare sector. It isn’t just the management; it carries over to the Board of Directors. When we presented the Board with where we wanted to go, it was very well received. Moving forward with confidence—especially within the conservative environment of the medical community—is very important for us, and we have now been able to engage medical professionals that have been quite reluctant to engage with us in the past. We’ve gathered some momentum and it’s going to accelerate very quickly, and that’s directly as a result of this new management,” Waters remarks.
“I’ve successfully launched several start-ups in the past, and what is really important for entrepreneurs like me is to be associated with a group of investors who can embrace innovation and add value in building a viable company. Start-ups are extremely difficult and it’s not getting easier because of the constant state of flux in financial markets. You have to shut out the noise, focus on a vision and diligently execute a plan to ensure the business adds value to all stakeholders. Sanjeev and his team are visionaries, open-minded and supportive, allowing Sequant Re to explode in the market,” Cloutier adds.
At the moment, PDH is focused on increasing shareholder value, developing the businesses it is involved with and pursuing further opportunities.