Business Strategy for the Family Office Members of a Major, Public Company in Brazil
Active Living International supported an investment office of the three founders and majority owners of a $7.3 billion dollar cosmetics company in Sao Paolo in the development of a strategic vision to deploy investment cash into the senior housing industry.
Our client, Janos Holdings, is a longtime, public market leader in the cosmetics industry in Brazil. Its three founders are the majority shareholders in Natura, a public company with revenues of $7.3 billion (USD) at the time of Active Living International’s engagement. The principals formed Janos Holdings to develop investment opportunities that were consistent with the company’s financial and philosophical objectives
Janos Holdings had a history of very successful, large, outside investments, but had no in-house expertise in seniors housing, and they wished to create a new company with a “first-mover” advantage in the country.
Active Living International’s deliverables were divided into two phases:
• Prepare a list of basic screening criteria of what would constitute a good operating partner to work with the Janos team to rollout 20+ assisted living communities in the country.
• Produce all the presentation materials to attract the right partner
o Teaser and other presentation materials for candidates’ review.
o Design the candidate screening criteria.
• Based on the criteria defined above and on Active Living International’s knowledge and contacts, produce a list of American and European companies that could meet the criteria.
• Vet the candidates with the client and develop a “short list” of the most qualified.
• Make a “negative list” with the prospective candidates that declined to participate or that were not capable to perform or that were not interested in the opportunity.
• Arrange for and participate in visits with the final candidates in Europe and the United States in a “road show” format.
• Conduct a presentation to the shareholders reporting to Janos’ on the final candidates and assist in the decision on how to proceed with the project.
Active Living International developed a proposal with the following elements for a projected phase 2. Given the current economic conditions in Brazil, Phase 2 has yet to be operationalized.
International Benchmarking Analysis—presentation on other countries’/companies’ approach to seniors housing.
• Identify operational results by a detailed review of revenues and expenses for U.S. and European operators—based upon the due diligence materials received from the three candidates and based upon Active Living International’s source documents.
• Perform local, secret-shopping and open reviews in the candidates’ market places to determine operational expertise.
• Analyze the reimbursement and regulatory environment affecting financial results.
• Detail the operating practices as to acuity pricing, market rates, general expenses and labor conditions.
• Market-sizing analysis—Work Janos’s team to calculate basic demand parameters of the assisted living resident and adult-child markets.
• In tandem with the Janos team, project a rollout in selected markets in Brazil to determine the potential size and profitability of a multi-facility rollout in selected cluster markets in Brazil.
• Perform a line-item-by-line-item review of the existing performance model as developed by the Janos team.
• Identify the key opportunities and risk factors (growth pace, real estate availability, human resources, etc.).
• Assist in developing market survey tools that describe Janos’ final vision of the assisted living/memory care offering in Brazil.
• Ensure that the operating model, marketing savvy, cultural flexibility, control and governance, C-level personnel commitment, dilution, and ethical filters, etc. are all aligned with the vision of Janos.
• As a contingency if a suitable operating partner were not found identify individual, potential C-level candidates with a medium-to-long range commitment to orchestrate the successful development of the initial product and to guide the subsequent development of future ones as defined in the rollout strategy.
• Due to the work that Active Living International successfully completed the Janos board unanimously endorsed the Phase 1 plan.
Further development of the work done by Active Living international and Janos has been put on hold by Natura, the parent company while it deals with Brazil’s challenged local economy.
“Our Brazilian investment group retained the services of Active Living International to help us understand the dynamics and major value levers of the Senior Living business in the most important markets in the world. As the leader of the project, I was utterly satisfied with the level of knowledge, the quality of research and analysis, and an incredible service mentality that translated into a very senior and constant dedication to our project. After working with several specialist consultants in the past, in many different industries, the amount of value added by the Active Living International team to our investment case was above and beyond any of my expectations.”
André Rizzi, Janos Holdings, Sao Paolo, Brazil