The GP corporate will continue to focus on its strong rural and regional presence.
Sydney-based investment company Genesis Capital is the new majority shareholder of Ochre Health, a GP corporate with a footprint of more than 60 clinics across the country.
Ochre was one of the final remaining GP corporate clinics still owned and operated by doctors; its two cofounders, GPs Dr Hamish Meldrum and Dr Ross Lamplugh, are staying on as minority shareholders.
Dr Meldrum will retain his seat on the board, but Dr Lamplugh has stepped down.
The two GPs founded Ochre under the name Australian Outback Locums in the rural NSW town of Bourke in 2002.
According to the Australian Financial Review, Ochre was brought to market in 2023 with revenue of $93 million and $12 million – $15 million in earnings, with its valuation expected to come in above $100 million.
Genesis Capital partner Dr Michael Caristo, who completed a medical degree but has never practiced, said the private equity firm had been particularly interested by Ochre’s rural model.
“We loved what we saw through due diligence, we spent quite a lot of time out on the road in the rural communities that Ochre serves,” he told The Medical Republic.
“It’s a really critical part of what they do, and the whole the whole process started because Ochre needed some more capital and support to do more of what it already does, and that’s the approach they made with us.
“And so we’re backing existing strategy of the business to continue to grow and do more of what it already does so well.”
The AFR reported that another private equity firm, Crescent Capital, had also been interested in acquiring Ochre.
According to Dr Meldrum, who told TMR he retained a “significant” stake in Ochre, the co-founders had been seeking a buyer to allow Dr Lamplugh to step away from the business.
“It’s been 22 years, and that’s a really good innings for anyone,” he said.
Dr Lamplugh told TMR that he was confident the new majority shareholders would continue with their original vision.
“The reason we went with Genesis was because their vision was to continue what we were doing and keep growing along the same road that we’d taken it,” he said.
“They were really keen on our rural side of our business, and professed to be keen to grow that side … whereas in the past when we’ve looked at partners, a lot of them have not understood the rural business, or had not been excited by it.
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“You sort of had the impression that at the first chance, it could decimated, I suppose.
“But Genesis convinced us that they liked that part of the business.”
The other businesses in Genesis Capital’s portfolio include telehealth mental health provider HealthBright, aged care and disability care service Kinyara Health and Momentum Clinical Research.
It previously owned a stake in Queensland GP corporate SmartClinics, which it offloaded to UK firm Livingbridge in 2020.
Dr Lamplugh said the secret to Ochre’s success in the rural market had been recognising doctors as their “key clients”.
“From day one, we understood that … if we looked after our doctors really well, we could attract good doctors and the business would be fine,” he said.
“Once you have good doctors, then you can provide really good service to your community and your patients.
“But again, a lot of people don’t seem to understand that – I think a lot of the competitors out there are taking their focus off that and putting it onto cutting costs.
“They’ve forgotten that a doctor’s got unlimited options, so to get them to come and work for you, you’ve really got to treat them very well.”
The sale was made official earlier this week, coinciding with the Labor Party’s commitment to opening another 50 urgent care clinics across the country.
It’s not the only recent movement from private equity in the general practice space; earlier this month, Family Doctor GP chain made a deal with private equity firm KKR to refinance a loan totalling $300m.
Emergency care physician Dr Rodney Aziz retains ownership of Family Doctor.
