Of course, seven weeks is a long time in APM years. As we said, this company is trying to secure its third PE owner since the start of 2020, and had a near $1 billion initial public offering in 2021. That float saw APM’s then selling shareholders, most notably Madison Dearborn, walk away with $643.1 million.
So, is Goldman Sachs and Allens-advised Madison Dearborn a buyer or a seller? It specifically requested confirmatory due diligence on a non-exclusive basis, which is unique.
It looks like it could go either way depending on the price, which makes for unusual four-way negotiations between the Chicago-based PE firm, APM executive chair/founder Megan Wynne (a long-term shareholder), APM’s independent board committee chaired by Nev Power and those other frogs, including CVC.
APM shares tanked 30 per cent to $1.14 on Monday. Institutional investors are fed up with the corporate shenanigans – and even more fed up with the earnings downgrades, with nearly 10 per cent shaved off FY24 EBITDA guidance. The downgrade helps explain why CVC walked from its $2-a-share indicative offer post diligence.
What now? APM’s independent board and its bankers at UBS are free of any exclusivity provisions (the agreement with CVC was tight) and can see what else is out there. They hit the road with Madison Dearborn’s $1.40-a-share offer in their back pocket, which despite the “disappointing” label is now being talked about as the floor price.
A bid at $1.40 a share would value APM about $2.3 billion including debt, or about eight times FY24 forecast underlying EBITDA. The company floated at (and Madison Dearborn sold at) 12.7 times EBITDA in November 2021 and a $3.74 billion enterprise value.
