APM shares plummet over ‘disappointing’ takeover offer
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The news: APM Human Services has received what it describes as a "disappointing" takeover offer from its largest shareholder US private equity firm Madison Dearborn Partners.
The numbers: APM shares plummeted 28.53% to $1.16 by 12:33pm AEDT following the announcement of the offer.
Currently, Madison Dearborn Partners holds a 29% stake in APM and has three directors on the board. It offered $1.40 per share for all the shares it does not hold, valuing the company at $1.3 billion.
The non-exclusive offer would total around $911.68 million for 71% of the shares it does not hold. APM’s share price last closed at $1.63.
The employment services provider noted that it anticipated its FY24 underlying EBITDA would be in the range of $280 million to $290 million and underlying net profit after tax would be in the range of $95 million and $105 million. This was compared to FY23 EBITDA of $365 million and underlying NPAT of $178.2 million.
APM attributed the lower EBITDA and NPAT to "extended low levels of unemployment, reducing client flows and requiring increased support to achieve sustainable employment for our clients".
It noted that it had invested in a new client management system in March 2024 that had temporarily impacted productivity and the benefits of the new system were expected to be realised in FY25.
APM also expected an additional $300 million in revenue and approximately $40 million in underlying EBITDA during FY25, compared to FY24, from new contracts.
The context: APM’s independent board committee (IBC), which was formed to evaluate potential takeover offers, previously rejected a takeover bid by private equity firm CVC. CVC then made an improved offer but subsequently was “unable to finalise a transaction”.
What they said: Nev Power, APM lead independent director and chair of the IBC, said: “The IBC notes that the offered price per share under the MDP proposal is disappointing.
The source: ASX announcement
