CVC offers sweetened $1.8bn for health group APM

Investors pile into health and human services group APM after it received a sweetened $1.8bn takeover bid from global buyout fund CVC.

Health and human services group APM has received a sweetened $1.8bn takeover bid from global buyout fund CVC after rejecting a previous low offer.

The shares of the Perth-based group rose nearly 14 per cent to $1.61 in morning trade after it agreed to ‘re-engage’ on a higher takeover offer by the previously rejected suitor.

CVC Asia Pacific’s $2 per share bid is an significant improvement on the $1.60 per share offer rejected earlier this month, but comes with a long list of conditions and assumptions. CVC has a four-week period of exclusivity until March 27.

The revised offer is conditional on certain shareholders, including executive chair Megan Wynne, chief executive Michael Anghie and key managers electing to receive all or substantially all of their consideration in shares.

The proposal also assumes that US private equity firm Madison Dearborn Partners will elect to get shares in return for approximately 75 per cent of its APM shares. It is subject to funding and other regulatory and other approvals.

Ms Wynne founded the company in 1994, having spotted a gap in service delivery and realising there was an opportunity to provide regional rehabilitation and allied health services in Geraldton and Bunbury in Western Australia.

APM is now a big player in the national jobs and disability services sector, delivering disability, workplace health, NDIS support and home assessment services, as well as psychological intervention, medical, psychosocial and vocational rehabilitation, vocational training and employment assistance and community-based support service.

APM’s Megan Wynne in West Perth.

Ms Wynne said that throughout the bidding process, the management team would remain focused on supporting “our people, continuing to deliver the highest-quality services globally for our clients and stakeholders, and executing on our strategy.”

Luxembourg-based CVC is one of the largest buyout funds in the world, with $US199bn of assets under management. In August 2021 it opened an office in Sydney, hiring Brett Sutton as its chairman for Australia, formerly of Affinity Equity Partners.

The APM board reiterated that shareholders did not need to take any action in relation to the revised proposal at this time. APM today reported first half revenue of $1,116.8m, up 31 per cent on the prior corresponding period. Underlying earnings fell 12 per cent $147.8m.

APM Group chief executive Michael Anghie said the company was operating in an environment with extended and historic low levels of unemployment which had impacted client flows and the intensity of support required.

“While we are seeing early signs of stabilisation in unemployment data and caseloads in employment programs, the current environment remains subdued,” said Mr Anghie.

“During these times it is important for APM to provide additional support to those furthest away from the labour market to give them the best opportunity to achieve life changing sustainable meaningful employment.”