Dr Sanjeev Kanoria, the co-founder of Advinia Health Care, acquired 22 care homes earlier this year from Bupa who had become ‘inefficent.’ Kanoria also owns Austrian Anadi Bank, helpfully, which supported the acquisition. Here we explore why Kanoria decided to buy the care homes from Bupa.

Why did Advinia choose to acquire the care homes and why did you feel it would be a good move to do so?

We were delighted to move into the top ten private care providers in the UK with our acquisition of 22 care homes from Bupa.

There is an alarming care home crisis in the UK. The number of older people in England without social care support has hit a record high, and there is a massive shortfall of care home places. The NHS is also under massive strain.

The Bupa opportunity came to market at a very good time for us. We were in a very strong position to expand our operations and were keen to address the increased demand in the UK.  Because of our vast experience in the sector, we were confident we could turn these homes around.

Bupa had become too big and as a result inefficient and unable to provide the necessary level of care. In the service sector, there are serious diseconomies of scale that come in after a certain point. Bupa had 20,000 beds and found it difficult to manage the quality of operations.

Some of the homes were losing money, some were not making as much as they could have. The costs were quite high, the capital expenditure quite big.

No savings have been made up until now.

We are still integrating and consolidating but we feel like a lot of savings will be made in the long run because of our expertise in managing homes efficiently.

Since completion, turnover is around £100 million and we employ 4,500 people across the country. We took on all 3,700 staff at the Bupa homes. There was a high level of staff engagement and their commitment to care was very much in line with our company ethos.

Was the offer initially accepted or rejected and how long did it take from initial offer through to completion?

Advinia initially bid for the full portfolio of 144 Bupa care homes and we were very close to having our bid accepted. As a result of last minute complications, 122 were acquired by HC-One and we secured a smaller portfolio of 2,700 beds.

It was a long and drawn-out process which lasted for about 16 months, completing in February of this year.

Will acquiring the Bupa care homes mean Advinia changes its marketing strategy in Britain in any way?

We are passionate about helping and supporting those people in society that need it the most. Our aim is always to ensure the highest quality of care for the elderly as well as value for money. This acquisition further represents our commitment to building a trusted and robust organisation which puts residents first.

We have expertise in running care homes for 20 years. We learned the business from the ground up and we are confident that we know what does and does not work. So, we have not made any major changes to how the business is run since we completed the deal.

There are challenges with marketing a care home. Notably, the cross-generational target audience ranges from younger decision-makers looking for care for their parents or older relatives, right through to people seeking care for themselves or their partner. The diversity makes it difficult to target a particular audience. The care home decision maker age group is as large as 40-90 year olds. There is a huge range of needs, attitudes and desires which need to be considered.

There is no one-size fits all approach. For each home we communicate across all channels, our powerful and sensitive ethos and the quality of care and of our staff. This includes traditional PR, particularly with regional media, as well as social.

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We are also very engaged with local communities where it is incredibly important to have a strong, positive profile. We use regular community events to provide as much information we can on the work we are doing and the quality of our homes and care.

Company culture will change. At Advinia, we empower each manager to be a leader and to run their homes like an entrepreneur. They are motivated to make decisions for themselves. At Bupa, decisions all went through head office. Things were very centralised which caused delays in decision making at every level.

Who do you consider your main rivals now you have acquired these Bupa care homes?

These homes are community focused so the rivalry depends on competition in local area. The industry is so fragmented that there is not really national competition. We could be competing with Bupa in a particular region or another big provider elsewhere. Because of our focus on care and building simple congenial environments, we are generally the preferred choice.