Advent Partners’ SILK Laser fills out, looks offshore for 2020
It’s two years since Australia’s laser clinics industry saw an influx of private equity proprietors that shot it to the top of the “sexy sectors” list for dealmakers.
Global firm KKR and Melbourne’s Advent Partners snapped up two of the leading players – and while they’re keeping out of the headlines for the time being, they’ve not been idle.
In particular, Advent’s SILK Laser Clinics’ local business has boomed – to the point where it is mulling expansion offshore and could even be back among the deals in the coming 18 months.
“Our expectations will be an exit in the next 18 months – could be an IPO, trade sale and/or a private equity sale,” SILK Laser Clinics founder and director Martin Perelman told Street Talk.
SILK was backed by Advent in February 2018, in a transaction that valued the laser clinics business at $50 million to $100 million.
And it looks like the deal is working for both parties, at least according to the numbers.
“We have just completed over 2.5 million treatments across our business,” Perelman said.
SILK opened its 50th Australian location last week, up from 12 when Advent took its stake.
In the past three years, SILK’s customer numbers are up nearly five times while revenue is up seven times.
Like-for-like clinic revenue growth was 33 per cent a year in the three financial years to 2019.
Perhaps the jewel in the SILK crown is its injectables business, which involves procedures like anti-wrinkle injections and lip fillers. The unit has more than doubled every year for the past three years.
And it’s these numbers that also have management thinking about what’s next.
“2020 will see us take the brands offshore and look to make us an international player,” Perelman said.
“A few offshore markets are showing interest – parts of Asia and also parts of Europe.”
Perelman said SILK was investigating three or four areas for expansion and was in the process of “weaving our way through legislature requirements” as part of its due diligence.
Going international would see SILK follow in the footsteps of the country’s biggest laser and skin treatment clinics owner the KKR-backed Laser Clinics Australia. [KKR, advised by Macquarie Capital, bought Laser Clinics for around $600 million in 2017.]
Laser Clinics is the No.1 player in the Australian market in terms of size, with more than 130 locations, and has operations in New Zealand and the United Kingdom.
No.2 Within Two Years
On SILK’s current roll-out plans, it is positioning itself to be No.2 by network numbers within two years.
The difference between SILK and Laser Clinics Australia is in their respective growth models. Laser Clinics is an investor franchisees model, whereas SILK is an owner-operator model.
“We really focus on the owner, we find that model means they are really invested in making that store successful,” Perelman said.
Source: Australian Financial Review. 1 December 2019 (https://www.afr.com/street-talk/advent-partners-silk-laser-fills-out-looks-offshore-for-2020-20191126-p53e4l), Editors: Sarah Thompson, Anthony Macdonald and Tim Boyd