APM promoters exit jobless profits in ASX float, turn to profiteering from disabled

Economy & Markets, Featured||
APM float, JobActive
Unwitting shareholders to get buried again? Illustration: Michael Mucci.

The impending $972m float of employment services provider APM is a classic case of foreign financiers dumping their stock into the laps of unwitting sharemarket investors. Callum Foote, Stephanie Tran and Michael West report on a bonanza for middle-people.

What do you do when your business model is on its last legs? Float your company on the sharemarket. Sell it to unwitting super funds and retail investors.

For sheer chutzpah, the float of APM is right up there with Myer and Dalrymple Bay Coal Terminal; the former gutted and flogged on the ASX by private equity mob, TPG Capital; just when the internet was about to smash department stores.

The latter, re-labelled Dalrymple Bay Infrastructure, flogged to the super funds and (back to!) the Queensland government by the private equity Machiavellians from Brookfield when coal was already a thing of the past.

Now we have APM, it’s old business model of churning Australia’s unemployed on its last legs, hyping its $972m float on the sharemarket. Like Myer and Brookfield, there are foreign private equity people behind it; tax cheats and main-chancers looking to inveigle dopey sharemarket punters.

  • APM racked up huge pandemic profits by exploiting Australia’s jobless and the failed JobActive program;
  • Paid almost no income tax despite billions in public income from government contracts,
  • Now pushing the “growth story” of “transitioning” from jobless to disabled and reaping profits from the NDIS,
  • Hyping sharemarket float via financial press gossip columns and major investment banks. 
  • Made political donations to major parties, got huge contracts from government.

Michael West Media will shortly publish an investigative report into the JobActive sector which exposes the profiteering and the failures of the scheme and highlights the transition in corporate strategy which is now afoot. That is, providers such as APM have switched their “expansion” strategies to focus on the NDIS, to profiteer that is from Australia’s disabled rather than the jobless.

Typical slick marketing tactics for IPO

Typically, there is not even a prospectus for the public float filed with the ASX yet, but a torrent of marketing and PR has raked in the sharemarket pre-commitments. At least that is what we are told. According to the “pre-deal research” from the cuff-linked pirates of investment banking via the AFR:

“The pre-float reports are flying for disability services business APM on Wednesday morning, as the company’s four lead managers step up their pitch to institutional investors. Goldman Sachs’ analysts valued APM at $3 billion to $4 billion on an enterprise value”. 

All the usual suspects are aboard the gravy train, from Goldman Sachs to Credit Suisse and UBS. It’s one bunch of middlemen pulling off a sharemarket grift on behalf of another bunch of middlemen.

Yet the writing is on the wall

The press suggest the stock owned by the APM founders and financiers will be escrowed. That is, held for a period before they can sell it. The investment bankers could not have sold this any other way, as forecasts are based on the surge in government income from employment services but that business model is on its way out.

The broker reports also note that future profits hinge on the proposition that government outsourcing is a trend that will continue to drive corporate profits (even though the privatisation craze and the outsourcing of government has been a costly failure in many sectors, from energy to jobless services).  

So it is that the founder and owners of employment and disability company Advanced Personnel Management, or APM for short, after growing fat from 6 years of safe government JobActive contracts, are have opted to cash in via an IPO.

Together, Advanced Personnel Management (APM) and Serendipity, owned by the same parent company APM Human Services International, are the second largest jobactive provider operating in Australia by value of government contracts. 

Since 2015, these two operators have pulled $1.12 billion in taxpayer funded contracts.

However, a large portion of the JobActive contracts is about to dry up come 2022, when the Federal government institutes its New Employment Services Model (NESM).

Under the NESM, individuals who are deemed to be ready for work will only be required to interact with a government app rather than a JobActive service provider directly.

This is designed to curtail the billions wasted in public funds on the service providers, which are now therefore “transitioning” their business models to focus on profiting from the “disabled market”, Australians with disabilities that is, via the NDIS.

It seems APM founder Megan Wynne and chief executive Michael Anghie are looking to get out while they can, and are expected to put their shares in a voluntary escrow as part of the company’s sharemarket float, as reported by the AFR.  

Whether APM and Serenity can continue their year-on-year profit increases with a significant portion of the steady government funding set to dry up is questionable. Yet this is the story being spun, via the financial press, to potential investors in the APM float on the ASX.

APM has not yet filed its 2020 accounts with ASIC. However, the 2019 financial report shows revenue more than doubled from $223 million in FY2018 to $511 million in FY2019 as the JobActive service providers as a sector cashed in on the Pandemic.

Despite this massive increase in revenue, drawn from more than $607.2 million in receipts from customers, APM reported a modest operating profit of just $54 million.

The ATO’s Corporate Tax transparency database has APM paing just $92,000 income tax despite its massive public revenues. Nonetheless, it’s a better showing than in 2018, when the company managed a tax benefit and was paid $7.2 million by the Australian Tax Office. 

Michael West Media put several questions to APM regarding its financial statements, and although the aspiring ASX floaters, along with their promoters and PR people, have been extremely active in the financial press such as AFR and The Australian, they have not been prepared to comment..

With APM’s safe government contracts, the offer has already attracted a significant amount of investor money, seeing Australia’s employment services industry as a low-risk, high profit investment.

In 2017, Quadrant Private Equity, an Australian private investment firm, bought a 60% stake in APM at a valuation of $400 million.

In the following years, APM expanded its operations, acquiring Ingeus from US-based Providence.

Ingeus is a British-based, Australian provider of employment and health services founded in 1989 by Therese Rein, who is the wife of former Prime Minister Kevin Rudd. Rein now sits on APM’s advisory board.

In March 2020, as the pandemic began to grip, American investment firm Madison Dearborn acquired a controlling 55% stake in APM; the price it paid reflected a $1.5 billion valuation This takeover made American controlled firms the two largest profiteers from government  contracts in the jobactive program.

APM’s biggest rival, Max Solutions, is also US-controlled. Together, these two American controlled companies, along with another smaller provider, Atwork Australia, have pulled in $2 billion in government JobActive contracts. This equates to 60% of all taxpayer money spent on the scheme. 

Other notable APM shareholders are Megan Wynne herself, who still retains a $254 million, 27.2% stake, and her husband Bruce Bellinge who owns a $132 million, 14.1% stake through his company Bellinge Holdings.

The next and only other large shareholders are Michael and Sandy Anghie. Michael Anghie owns an $8.47 million stake directly while Sandy Anghie (the Deputy Lord Mayor of Perth) owns another $6.15 million stake as joint shareholders of Wattle (WA) Pty Ltd.

EntityValue of sharesPercentage
Madison Dearborn Capital Partners$512 million54.7%
Megan Wynne$254 million27.2%
Bellinge Holdings Pty Ltd$132 million14.1%
Michael Anghie$8.47 million0.9%
Wattle (WA) Pty Ltd$6.15 million0.66%

Political donations

According to the AEC’s Transparency Register, APM was a significant political donor during the 2019 election, contributing $119,673 to the Liberal Party and $22,372 to the Labor Party.

Donations in the 2019 election cycleTotal donations since 2015
Liberal$119,763$165,313
Labor$22,372$52,572





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