Towns and cities across the country host independent opticians which could benefit from being part of a wider network. All Seas Capital have helped provide exactly that, with its investment in Hakim Group.
The local identity and community bonds which independent practices cultivate can be an important part of their business model. But it also means they miss out on the economies of scale enjoyed by larger chains.
Hakim Group have sought to resolve this conflict. Founded by Bolton-born entrepreneur and optometrist Dr Imran Hakim in 2005, they are a rollup of independent practices across the UK and Ireland, including opticians and audiologists.
The group allows partner practices to retain their own independent identity, while giving them access to the scale benefits such as centralised support services — training, IT, procurement, finance, technical and HR — that a large network offers.
“Taking over these operations frees up a lot of time for entrepreneurs, allowing them to focus on what really drives the business, which is quality care,” says Cristobal Cuart, Co-Founder of All Seas Capital.
All Seas’ investment thesis involves supporting European mid-market businesses, with an emphasis on family-owned brands that have already achieved profitability.
“Hakim Group represented a very All Seas transaction, with a strong entrepreneur and a clear vision of growing in the market” explains Cuart.
The firm operates a hybrid financing model, typically investing a combination of debt and equity, with the average size of the firm’s investments being €30–100m. This sees them taking a minority stake in portfolio companies, while enjoying Board level involvement and some decision-making rights over their direction.
The firm considers this model to be particularly attractive for entrepreneur and family-owned businesses which want to take on additional investment without ceding majority control, and also seek PE-style support.
When All Seas made the initial investment in 2020, Hakim had around 115 independent practices as members. Now, it has over 500. This transformation was achieved during a period of significant economic disruption. “At the time that we negotiated the deal, the Prime Minister was in intensive care,” explains Cuart.
The Covid-19 pandemic shut down the high streets which practices typically inhabit, bringing low levels of consumer spending, and high interest rates when lockdown restrictions were easing.
To address this challenge, the group ran six webinars with independent opticians across the UK, explaining to them both the services it offers, and advice on how business owners could navigate the current environment.
“A lot of them found this tremendously helpful,” says Cuart. “It also meant we increased our database of independent practices from 150 to almost 1000.”
“Helping these opticians during what was a difficult time for the industry created significant goodwill,” he adds. “Some of those independent practitioners would then think about partnering with Hakim in the years to come.”
After responding to the tailwinds of the pandemic, All Seas supported Hakim to make operational changes to help grow and professionalise the business.
Hakim strengthened its leadership, including adding a new CFO, to reduce the extent to which day-to-day operations were dependent on the CEO.
It also helped increase the number of audiologists as members, to diversify the group’s offering.
New financial KPIs were implemented as part of an improvement in information reporting and an efficiency drive, giving the group more granular financial data to help it better understand where to drive value. The result was a fast-paced increase in the membership of the Group, but that brought problems of its own.
“The biggest challenge of a roll up strategy is knowing when to stop and focus on integration, versus when to keep adding new partner practices” says Cuart.
“We had many conversations with opticians where we were telling them: ‘we want to buy you but not right now, come back to us in three to six months and we’ll have the capacity to do that’.”
An expanded HR capacity helped address these challenges, allowing the company to onboard new partners more quickly, and then make additional outreach.
In terms of the overall market, the benefits of a roll up strategy are clear. “We’ve seen a couple of competitors pop up through our investment period, seeing Hakim as a model to emulate” says Cuart, adding that “roll up stories have also seen success in adjacent sectors such as dental and pharmacy”.
All Seas realised its investment in Hakim by selling its entire stake in the company.
Moving forward, Cuart is confident that the business has room to grow on multiple fronts. It can further expand its base of audiologists, currently one of their fastest growing areas: he anticipates that over half of Hakim’s practices will be offering audiology by the end of the year. It could also look to adjacent professions for new members, such as ophthalmologists.
Cuart also believes there is room for international expansion, first through English-speaking or European markets. “We have very high conviction in both the management and the business plan that is currently in place,” he says.
That conviction is so strong that All Seas has reinvested in the business, alongside global alternative asset manager ICG.
“ICG are a strong partner, which shares our vision for the future growth of the business,” Cuart says.
“Hakim is uniquely positioned to be the acquirer of choice for independent opticians.”
