APM seals a deal with backer Madison Dearborn to return embattled Perth group to private hands

APM is set to emerge from a trading halt on Monday to announce it has done a deal with a private equity backer that values the beleaguered employment and disability services provider at a fraction of its $3.3 billion listing price.

The Michael Anghie-led company revealed on Friday it was days away from updating the market on talks over a $1.40-a-share offer lobbed by US-based Madison Dearborn Capital Partners in early April.

APM’s board at the time described the proposal — which would return the business to private hands less than three years after a disastrous public float in November 2021 — as “disappointing”.

But after seven weeks of talks and due diligence, Madison Dearborn has added an extra 5¢-a-share to the bid price, according to the Australian Financial Review, which was enough to secure the backing of the independent board committee chaired by Nev Power and including former WA treasurer Ben Wyatt

But at $1.45-a-share, it is well short of APM’s $3.55-a-share listing price and only 20¢ higher than its last closing price. It will also crystallise massive losses for the true believers who bought into the listing.

Madison Dearborn controls about 30 per cent of APM’s register, with founder Megan Wynne and her Perth IVF specialist husband Bruce Bellinge holding about 34 per cent.

Ms Wynne, Mr Anghie and Madison Dearborn were the big winners from the company’s float, with Ms Wynne and Mr Anghie receiving $30.4m and $40.9m, respectively. Madison Dearborn will be buying back the group for $1.33b, which is almost $2b short of its market value when it floated.

The deal is expected to give shareholders the option to receive the consideration in unlisted shares or cash.

Under the initial terms of the offer, certain shareholders — including Ms Wynne and founding related parties, Mr Anghie and key management — would have had to agree to receive all of their consideration in scrip.

The approach by Madison Dearborn came just weeks after fellow equity giant CVC walked away from an improved $2-a-share offer following four weeks of due diligence.

Suitors started circling APM, which employs more than 15,000 people at 1400 sites in 11 countries, in November last year when it warned of a drop in first-half profit.

It blamed the unexpectedly sharp fall on historically high employment in its key markets of Australasia, Europe and North America that reduced the uptake in its job placement programs and made it tougher to staff its allied health businesses.

Confirmation of the fall in January triggered a share price plunge from above $2 to record lows under 70¢.

APM is now in the midst of a detailed review that aims to save $25m from this quarter after it warned investors in April that it continued to suffer operational pressures because of persistently low levels of unemployment.