Since 2018, the mergers and acquisitions (M&A) world has been rocked by a brave new model, dubbed the ‘Overnight Multiple Merger Model’ (OMMM), which has yielded unprecedented results.
Only yesterday, it emerged that the first merger to be created using the OMMM model, accountancy group Xeinadin, has just secured a huge investment.
The OMMM is the brainchild of entrepreneur Feisal Nahaboo who, in this article, discusses its methodology, its impact and the sectors which it is transforming—root and branch.
In 2018 I had an idea: what if a large number of highly successful and profitable companies could be merged in record time, creating an industry major player overnight? This would send value sky-rocketing, offer enormous cost efficiencies and the ability for technological advancement, while allowing all ‘member’ companies to cross-fertilise skills and expertise, offering customers the innovations and customer service not found elsewhere.
You may have seen news coverage by the Irish Sunday Times last week of the 120-strong accountancy firm consolidation, Xeinadin Group, poised to benefit from the sale of a large equity stake in its advisory group to private equity firm Exponent.
That was exceptional in itself but only yesterday came even more exciting news—Xeinadin has just secured a huge, record-breaking investment.
Xeinadin was my first-ever Overnight Multiple Merger Model (OMMM), and this news is a testament to its power.
I remember creating the idea, literally, from my kitchen table. I drew a vision of how it could look and the model looked compelling.
I was so excited. I just knew there had to be a way to make a miracle come alive.
Having semi-retired at around 37 years old, I still had the energy and belief that I could deliver a top professional services firm in record time. I challenged myself to achieve this in 256 working days—almost a calendar year. We set up a company and named it after my two eldest children, Zein and Nadine. In May 2018, Xeinadin was born.
When I consolidated all 122 independent firms, we targeted treble the value of traditional values for such a merger.
According to the Irish Sunday Times, just two years later Xeinadin posted revenues (in May 2020) of £110.3million, and earnings before interest tax depreciation and amortisation (asset repayments) of £39.9million, which equates to approximately 36% EBITDA — a figure far higher than that typically seen in the sector.
This is particularly impressive when you consider that Xeinadin was a new entrant in a highly competitive accountancy market, and yet one demonstrating a growth which takes most firms around 50 to 100 years to achieve.
The subsequent, record-breaking investment which has just been secured further confirms my vision.
Since 2002 I had been working with over 600 individual accountancy practices up and down the land, helping them diversify and see a sizeable increase to their bottom line by integrating up to 42 new service lines.
So, the world of accountancy was a natural place to implement the first paradigm-changing model of its kind. My vision was simply to bring a diverse range of professional services—accountants, corporate financial specialists, financial services, HR specialists, legal experts and so on—under one roof.
In this manner, clients could receive a holistic service, directed and managed from a place they could trust, while accountancy firms could hugely improve profits through a work ethic of upselling and cross-selling.
It was dubbed a ‘corporate miracle’ at the time, yet to me it seemed an obvious move. It just required a brave leader to design the concept, build the strategy and create a detailed roadmap to prepare all 122 independent accountancy practices to enter the merger at once.
Xeinadin was built on zero debt (making it more robust and attractive to third-party investment), offered a low-risk vehicle for high profit after tax (PAT) and the ability to pay shareholders high dividends. And, as you have seen, the financial rewards are astonishing, just over three years’ later.
The OMMM quickly revealed to me another enormous benefit: it’s completely replicable.
With all the learnings acquired thus far, I’ve streamlined the process—which may even lead to further record-breaking consolidations happening sooner than the world-record 256 working days it took to fully build Xeinadin.
I can’t divulge all the details but, essentially, with an OMMM we are merging a significant number of highly successful and profitable companies into one group at low cost and in record time.
I hand-pick only the most skilled, well-qualified operators to establish the business, under close scrutiny by industry regulators. I personally recruit in every entrant. I must be happy with their attitude, mindset, personal and corporate values, future outlook as well as being satisfied that they are sharing, and willing to breathe, my vision.
Xeinadin was no fluke. I’ve repeated it and will do so over and over. It’s all replicable under a secret and specialised system that I built. Investors who can be patient for a year whilest I build the consolidation will be paying a fraction of the usual price to have equity in a top industry entrant. It’s not surprising large private equity companies are chomping at the bit to be part of an overnight multiple merger model.
So, I have done it again! This time bringing to the people of the UK and Ireland Alitam: the Pharmacy of the Future. This will transform the face of healthcare across Britain and Ireland with a world-leading medical system that will place preventative care and wellbeing at the heart of every community. A goal made possible only by the shared vision and efficiency that an OMMM can deliver.
This time, our merger involved a £120million-plus consolidation of approximately 100 stores, and an aspiration to build a FTSE100 company within five years. To date, a projected £8million of savings has been forecasted 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 World’s First Preventative Healthcare System
The central role of pharmacies in community-based health care means that the sector is already in an ideal place to transform our nation’s healthcare system from remedial to preventative care, and by so doing making the UK a genuine global trailblazer. I want to see us become the first countries in the world to create a preventative healthcare system.
The Covid pandemic has brought into sharp relief just how overstretched secondary healthcare services are. Waiting times are going through the roof, and it’s unacceptable.
Of course, the hard-working people of the UK and Ireland deserve so much better, our dedicated NHS and HSE staff deserve better, and the whole system is due a radical rethink.
All the time, trusted community pharmacists have been there, helping families for generations. Since the pandemic, they have been rolling out a Covid-19 vaccination campaign at an incredible pace.
They are highly trained and highly skilled fixtures in their communities. By uniting them under the one banner of Alitam, with a shared vision and determination to serve communities better, we are building a force to be reckoned with.
You are about to see highly-skilled, yet under-utilised, pharmacists taking on more and more ‘GP-type’ services, while also offering a broad range of clinical and well-being services instore.
I’m ambitious, and those joining me at the top table know we can help push boundaries and improve the health of everyone in the UK and Ireland. Only yesterday, broadcast news showed 6million people waiting for NHS treatments, the cost of which the government are unlikely to be able to meet.
This means, whilst people wait, they become more sick and possibly die. Pharmacy has the infrastructure in place to help make a difference and I want to be a leader of change. I have to help my kids and their kids have a future. There’s no future when we can’t even have our basic health needs tended to.
Zachary Brech, Former MD Of Credit Suisse, Appointed CFO Of Alitam
In order to ensure success, Alitam boasts a ‘Super Board’: all executive directors are pioneers in their field – top strategists, entrepreneurs, pharmacists, accountants and lawyers.
Our vision is bold, and highly achievable with the brightest minds like Sir Ken Olisa, Lord Lieutenant of London, at the helm. Sir Ken Olisa is also a non-executive member of the Huawei board.
And I’m thrilled to announce today that Zachary Brech, the Former MD of Credit Suisse, has just been appointed Chief Financial Officer (CFO). This demonstrates the extraordinary levels of confidence in the Alitam ‘Pharmacy of the Future’ concept, as Zac is a financial wunderkind in the world of M&A, a highly discerning and respected figure.
He personally managed the complex and high-profile merger of Alliance Unichem and Boots, and has been decorated for his achievements during his tenure at Credit Suisse.
I will be enlisting his support, particularly with the financial modelling of our ambitious 100-plus roll-up programme. He will also be tasked with the financial modelling of organic growth for individual pharmacies, as Alitam seeks to integrate innovative service lines in order to offer the public the healthcare they so desperately need.
Furthermore, Zac will assist me in devising a financial model to acquire large, empty high street stores, and kit them out as ‘Medical and Wellbeing Centres’. These will operate as a one-stop-shop for health and wellbeing, providing not just highly regulated medical care but further treatments such as physio, vaccinations, aesthetics and even midwifery.
Zac will be closely involved with their roll out, across the UK and Ireland region, over the next ten years.
So, through the Alitam OMMM a revolution in healthcare is upon us. Already, new technology is being implemented speedily among the 100-plus members, and innovations such as in-store screens and robotic dispensing are transforming the day-to-day running of many pharmacies. Our pharmacists and their teams are delighted and relieved to be able to spend more time caring for each customer.
There are many more Overnight Multiple Mergers in the pipeline, since any sector which is saturated and ripe for disruption is the perfect home for an OMMM. The care home and professional services sectors are just two of our planned territories for the very near future.
The OMMM is unique and ground-breaking, and the companies it gives rise to are the same. The model is impossible to replicate without inside knowledge; creating enormous value in its licensing ability and major competitive advantage for those who license the model through my company, the Overnight Multiple Merger Group (OMMG).
A number of large Private Equity firms have already approached me with regard to forming a joint venture on future OMMMs, as well as investing in those created to date.
Since I do not ever rest on my laurels, I will continue to improve the model, making sure to appoint only the highest quality board directors and headhunt the most profitable companies, to deliver enormous profits.
The Overnight Multiple Merger Model is a force to be reckoned with, across many industries, for many years to come.