1. Establish the Beacon UK baseline position

We worked with the Beacon UK management team to understand: the company structure; its recent history in terms of service and product sales; market penetration; overall operational and financial performance; and core business capabilities. We also held discussions with a group of internal and external stakeholders to gauge views on how Beacon was regarded and to identify its key strengths and challenges.

2. Understand the UK market and the potential for growth

The market assessment comprised the following elements:

  • A detailed assessment of the domestic markets for mental health and learning disability services covering the four home countries.
  • Comparison of the UK and US markets to help identify areas of commonality and divergence to provide an understanding of the context of the UK market.
  • Description of how mental health and learning disability services are organised across the four countries, including analysis of the overall size of the mental health and learning disability market and how it is segmented.
  • An explanation of the current commissioning landscape including who is buying, how this is changing and what are the future trends. This also covered the key policy drivers and the potential implications for Beacon.
  • An analysis of the competitive environment, showing the range of providers: within the NHS; other publicly funded operators; the third sector; and the private sector. This helped Beacon to understand the full range of competitors and potential opportunities for collaboration or acquisition.

As a result of the market assessment, Beacon had a comprehensive view of the nature and scale of the addressable market in the UK, broken down by market sector.

3. Identify a longlist of business opportunities for growth and validate and prioritise these opportunities

We used the outputs from the market assessment to identify and validate potential new business opportunities based on our market insight and through a process of engagement with Beacon's stakeholders. The output was a comprehensive list of these business opportunities.

We applied our options appraisal process as the core means of evaluating the opportunities. Working together with the Beacon team, we undertook a ground up process of gathering data to inform development of a range of options to deliver growth. We worked with the UK team to evaluate and score the options based on available evidence which we collated into a robust evidence pack.

We supported Beacon UK and the US Executive team in appraising business options to identify the preferred option based on a rigorous yet open and transparent process of evaluating and scoring options.

4. Development of the financial model for a base case, upside and downside scenarios

We produced an investment grade financial model projecting income and expenditure over a 10 year period. The model included three scenarios covering three different levels of revenue growth based on contract wins and the required level of investment necessary to support revenue growth. The model characterised a fully burdened position depicting "the valley of death", the period during which significant upfront investment is made before there is a step up in revenue. It showed the internal rate of return and the year on year position for EBITDA.

5. Production of a go to market plan

We developed a go to market plan which described a series of activities and specific gates for investment decisions, covering distinct phases of delivery: the business readiness phase; implementation of the investment case; significant step up in sales and market penetration; and business as usual with an established growth trajectory.

We helped the Beacon UK team to review and update their UK propositions to ensure they were positioned to maximise business development opportunities.

6. Identification of the resource implications for the preferred way forward

Working closely with the UK and US teams, we developed a resourcing plan year on year identifying the investment requirements in staffing for the corporate team and the associated technology infrastructure needed to support growth and to achieve the level of sales and revenue projected under each of the three scenarios.

Outcome

As a result of the review, Beacon UK:

  • Had a strategy for expanding the business with clearly identified areas of potential growth in the UK mental health market, derived from a comprehensive  market analysis.
  • The go to market plan identified all of the steps required to deliver the projected growth, linked UK and US propositions.
  • The timing and quantum of staffing and infrastructure investment requirements were described in detail, including gateways for each stage of investment.
  • An investment grade financial model was produced setting out granular financial projections over 10 years.
  • The strategy, go to market plan and financial model formed the basis of a robust investment case submitted to the US board.
  • Going forward, the UK business had a comprehensive set of milestones and gateways against which to track progress against delivery of the strategy.
  • The UK management team was closely involved in all stages of the project and therefore had an in depth understanding of all of the assumptions and outputs.

 

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For more information contact:

Karen

Karen Cheetham,
Partner at GE Healthcare Partners

Email Karen

Or Call: +44 (0) 20 7479 9720