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INVESTIGATION: Optometry acquisition proposal contains inaccurate claims

03/07/2019By Myles Hume
An alluring proposition sent to Australian optometrists, offering to purchase their practice as part of an Australian Stock Exchange (ASX) float, has been found to contain inconsistent and erroneous claims.

Quantum Capital, a Brisbane-based private investment and corporate advisory firm, has recently approached optometry practices with acquisition proposals. The company’s aim is to form a group of optometry businesses, with the view of listing an aggregated entity on the ASX in the first half of 2020.

However, Insight has uncovered inconsistent and inaccurate statements in the proposal pertaining to the experience of Quantum’s executives in other business groups.

The revelations have prompted Mr Aaron Revelle, the CEO and founder of Quantum Capital who was once accused of embezzling US$7 million (AU$10.1 m), to dismiss the proposal’s error as a “typo”.

Revelle claims the document has since been rectified, however would not provide proof of the correction.

Questionable claims

Quantum Capital has ambitions to initially acquire between 25 and 30 optometry practices which would trade as Lentium Group on the ASX.

The firm is offering to purchase practices it has identified as a “right fit” for a sum of up to four times annual earnings before interest and tax, or up to five times that figure for a group of stores. Revelle told Insight the venture has already attracted significant interest.

The documentation claims Quantum’s team has a proven track record of establishing successful companies through the acquisition of cornerstone businesses. It also states that its principals “were instrumental in developing and listing National Veterinary Care Limited (ASX: NVL, 108% return since IPO) on the ASX in 2015”.

"The original [Quantum] letter was a template used at SEA which an individual for who English is a second language was responsible for printing and distribution"
Aaron Revelle Quantum, CEO Quantum Capital

NVL officially floated in August 2015 with an initial group of 35 Australian veterinary clinics. The proposal also advises that NVL is a “select venture from Quantum’s completed transaction portfolio”.

However, Insight’s inquiries have revealed that Quantum played no part in the ASX listing of NVL. ASIC records show that Quantum Capital was registered on 28 June 2018, around three years after NVL began trading.

Another Queensland-based investment firm, Strategic Equity Alliance (SEA), states that it was the company responsible for the NVL deal.

Mr Glenn Gaudet, CEO and founder of SEA and a founding principal of NVL, told Insight that neither Revelle, nor anyone at Quantum, had involvement in the listing of NVL.

“In fact, Aaron arrived after NVL was listed, he had nothing to do with it all,” he said.

Gaudet said Revelle was employed at SEA in 2015 for his mining experience. This was confirmed in a 2017 Business News Australia article, in which he further outlines the appointment of Revelle (known as Aaron Thomas at the time). 

However, Gaudet said Revelle left SEA last year due to a disagreement between the pair. When pressed about Revelle’s departure, Gaudet said he could not comment due to legal reasons.

Presented with this information and asked to clarify whether he – or Quantum – had any involvement with the NVL deal, Revelle admitted the proposal contained incorrect information.

He claimed the initial letter to optometrists contained “a typo”, which was later corrected, and proceeded to blame a staff member for whom English is a second language.

Glenn Gaudet
Glenn Gaudet
“In fact, Aaron arrived after NVL was listed, he had nothing to do with it all”
Glenn Gaudet, CEO Strategic Equity Alliance

“Regarding the letter, you have obtained a copy which was sent out with a typo in it which was later rectified with ‘the principals held senior roles at the firms which were instrumental in developing and listing National Veterinary Care Limited (NVL) on the ASX in 2015’.”

“The original [Quantum] letter was a template used at SEA which an individual for who English is a second language was responsible for printing and organising the distribution,” Revelle said.

He also conceded that Gaudet’s explanation was accurate: “I did join SEA at the time NVL was listing, to which it is correct my exposure was limited … Over my tenure there [at SEA] I worked on various projects with the same fundamentals as NVL.”

Revelle also pointed to another error in the proposal; this time in the mathematics used to determine the indicative price for a practice acquisition. “The letter has been rectified and was fortunately caught before it was widespread sent, to which we have also been very clear with speaking with people in the industry of our background and expertise.”

Designs for Vision

Insight asked Revelle for a copy of the corrected documentation but he refused to provide it, claiming it was “confidential” – even though the proposals have been widely circulated in the profession.

Instead he provided a company biography he claims is used in strategic documents, “some of which have been received by interested parties, which makes our experience very clear”.

Multi-million dollar lawsuit

Formerly known as Aaron Thomas until reportedly changing his name last year, Revelle has a controversial and well-documented past covering the entertainment and mining industries.

A contestant on the 2009 season of MasterChef Australia, Revelle shot to prominence in 2014 as the 26-year-old CEO of Oakmont Resources, a British-based mining company he established after reportedly raising US$70 million (AU$101 m).

In a widely reported case, Revelle faced litigation over accusations he embezzled US$7 million (AU$10.1 m) from the company to fund indulgent personal expenses including first-class travel, luxury watches, cars and jewellery.

Aaron Revelle 2009 MasterChef contestant
Aaron Revelle 2009 MasterChef contestant

When queried about the international media exposure the case received, he referred to a 2014 New York Post article, which stated he “is back on top” after the lawsuit was discontinued. It was reported that it included a confidential settlement.

Revelle also told Insight: “I maintain the position that the allegations were unfounded and baseless to which I have moved on in my career having carried out other financings and projects since to which were there any truth to the allegations.”

‘Overwhelmingly positive’

Regardless of his previous controversies, Revelle believes Quantum’s optometry group could seize upon a “highly fragmented” market. Post listing, the company would aim to continue acquiring businesses, and not seek to rebrand the portfolio under a single banner.

“Optometrists should seriously consider the Quantum proposal as the group will be the first of its kind in a significant period of time,” he said.

“The group will provide an attractive exit strategy for those optometrists who are looking to exit their business whilst also providing a unique opportunity for those looking to grow their career within a group framework.”

Revelle said the industry response had been “overwhelmingly positive with high levels of interest”.

“Right now we are looking at a variety of factors, inclusive of age of the business, its revenue and earnings, as well as its location and clientele matrix to ensure we have the right synergies within the initial group.

“Whilst Specsavers and Luxottica/OPSM have dominant market share, there are clear and present opportunities to implement value chain synergies amongst a listed group.

“A lot of practices have stated the need for a group like this in the market.”


More reading:

Former Masterchef season one contestant turned mining CEO Aaron Thomas ‘stole $7.6m to fund lavish lifestyle’, lawsuit says
Masterchef contestant and entrepreneur has hit out at claims he used $6m in company funds on girlfriend & luxury lifestyle
MasterChef star Aaron Thomas has claims he embezzled $7.6 million to fund a lavish lifestyle dropped in confidential settlement
Ex-mining CEO has embezzling lawsuit tossed: sources
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