March 31st 2022 marked a fairly big day in our lives. As Sam headed off to his Year 12 formal (which has survived the cancellation risk of the current Omicron wave sweeping through Brisbane’s high schools), undoubtedly a big milestone for him and his peers, it was also the day that the sale of our final stake in Icon Group to EQT completed.
The concept of Icon Group was first born in the old APHS boardroom at Mansfield back in 2007, during a strategy day designed to try and find solutions that would allow the pharmacy business to survive post the termination of a large hospital contract. There were two new directions for the business conceived that day, one involving taking the IP we had developed in automated medication compliance packaging for the aged care sector and turning that into a TGA licensed manufacturing business, and the other involved building an Integrated Clinical Oncology Network.
The plan that originated that day had three stages. The first was to futher expand our oncology pharmacy footprint across the country, which we believe would create opportunity to move into the ownership and operation of the medical oncology hospitals themselves.
At that stage we were seeing an increasing demand for oncology pharmacy services across our hospital customer base, and felt there was an opportunity for us to build on that expertise and be able to support the unfortunate reality of the projected increase in the number of cancer diagnoses.
To create an integrated network we knew we would need to also add radiation oncology services, and the final stage identified was the goal of expanding our service offer outside of Australia into Asia, as Australia’s economy shifted from the export of commodities to the export of services.
We signed off on the strategy and got underway, acquiring a number of additional oncology pharmacy businesses. By the time the global financial crisis hit in 2008 we were deeply in debt, and really feeling the impact of the exiting hospital contracts.
The most polite description of the next few years was that they involved serious grind, but we ground it out and in 2012 an opportunity presented to buy a group of medical oncology day hospitals in South East QLD where we had established a great relationship with the doctors after providing their pharmacy services for the past 5 or so years.
We sold the manufacturing business (the other of the strategic directions identified back in 2007) to fund the acquisition, and rebranded the centres to Icon. Stuart and my balance sheet was not going to support an expansion into the much more capital intensive radiation oncology sector, and in 2014 we sold a stake in the business to Quadrant Private Equity to enable this next component of the strategy.
Quadrant were great partners, and Icon entered an extraordinary window of growth. Not only did the business expand to include radiation oncology services, initially via the acquisition of the 3 ROQ centres in Queensland and followed by an aggressive expansion campaign across Australia, but shortly after with the acquisition of Slade Health, a TGA licensed chemotherapy compounder. The management service companies of both our Epic Pharmacy Group and Slade Pharmacy also joined the group, and Icon truly became an Integrated Clinical Oncology Network.
By the time Quadrant’s ownership window concluded in 2017 – one of the realities of private equity investment is that the clock starts ticking on their exit the day after the initial investment settles – the final piece of the original 2007 strategy had also been delivered, with the acquisition of a group of medical oncology services in Singapore.
Quadrant’s stake in Icon was acquired by a consortium of Goldman Sachs, QIC and Pagoda, and during this period the business continued to grow and expand both domestically in Australia but also into New Zealand, Hong Kong, Vietnam and China.
Stuart and I have always believed that an important part, if not the most important part, of a founders legacy is knowing when it’s time to say goodbye, and by 2020 we knew we were approaching the final mile of our personal journey with Icon. We both stepped down from active roles in the business well before the next sale process commenced so the executive had the freedom of absolute clear air to operate, but remained fully supportive of their execution of the business strategy and the sale process when it got underway.
We were delighted with the outcome of that process delivering EQT as the winning bidder, they have a great track record in healthcare and we look forward to watching from afar as they and the incredible Icon team go on to impact so many more patients around the world.
If you’d told Stuart and I, or indeed anyone who was in that APHS board room back in 2007 where that strategy would have evolved to 15 years on we would never have believed it. While the financial aspects of the story are the ones that make the headlines, the true legacy in our view, and the one we are incredibly proud of, is the number of patients that the business has been able to impact to date, and will continue to do so in ever increasing numbers into the future. I can’t tell you how many times we’ve been approached by someone who wants to tell us their Icon story – whether it be their own, a family member, or someone close to them, and it always involves not only the quality of the care they received, but the way the Icon team members made them feel during this challenging time in their lives.
Creating an environment where an incredible team has the opportunity to deliver the best care possible, to as many people as possible, as close to home as possible has been an absolute privilege, and on March 31 2022 we concluded our Iconic story knowing that we couldn’t be prouder of the legacy we leave.