Steward Holdings Group (SHG), a New York City-based real estate company and a provider of housing and medical services for special needs and veterans, is in talks with US-based investors to raise USD 10m to accelerate expansion, CEO Michael Fernandes Sr. said.
Investors will get a 10%-15% stake in the debt-free SHG, based on a USD 82m valuation. The company owns total assets of USD 38m, plus another USD 100m-worth of assets under management. It banks with Stifel Bank, he added.
SHG is a father-and-son run family business, with Michael Sr. having 60% ownership and his son Michael Jr. having a 40% ownership stake in the company.
While the company has engaged undisclosed legal and financial advisers , it also welcomes calls from buyside advisers. It hopes to conclude the capital raise process by March 2020, Fernandes said.
SHG generated revenue of USD 3.8m in 2019, with a 50% gross profit margin, up from USD 2.2m in 2018. The company invested time and money in 2018 to focus more on medical services, which is now paying off, he explained. As a result, it closed January 2020 with a USD 1m income, up 300% from the same month last year, he added.
The proceeds from the capital raise will be used to acquire and setup special needs & veterans housing units, as well as renovating existing ones. In this regard, the company is in talks to take over several hotels in New York city from one of the “largest independent hotel owners” in the city, Fernandes said.
Established in 2012, SHG provides housing, onsite medical and behavioural health services for special needs, disabled veterans and chronically homeless populations. All rental income comes from government vouchers while the medical services are covered by the Centers for Medicare & Medicaid Services (Medicaid), the CEO added.
The company also provides real estate solutions and consulting and residual management services, according to its website.