In the matter of APM Human Services International Limited (No 2) [2024] NSWSC 1241

Supreme Court New South Wales

Medium Neutral Citation: In the matter of APM Human Services International Limited (No 2) [2024] NSWSC 1241 Hearing dates: 25 September 2024 Date of orders: 25 September 2024 Decision date: 03 October 2024 Jurisdiction: Equity - Corporations List Before: Black J Decision: Orders made approving a scheme of arrangement. Catchwords: CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application under s 411 of the Corporations Act 2001 (Cth) for orders approving scheme of arrangement – Where formal requirements satisfied – Whether scheme of arrangement should be approved. Legislation Cited: - Corporations Act 2001 (Cth), ss 411, 611 Cases Cited: - Re APM Human Services International Ltd [2024] NSWSC 1095 - Re InvoCare Ltd (No 2) [2023] NSWSC 1350 - Re Tassal Group Ltd (No 2) [2022] NSWSC 1619 Category: Principal judgment Parties: APM Human Services International Limited (First Plaintiff) Representation: Counsel: J Williams SC/B Ng (Plaintiff) T L Wong SC (Bidders)

Solicitors: Gilbert & Tobin (Plaintiff) Allens (Bidders) File Number(s): 2024/288243

Judgment

Nature of the application 1. By Originating Process filed on 6 August 2024 the Plaintiff, APM Human Services International Ltd ("APM"), sought an order that it convene a meeting of its shareholders other than Excluded Shareholders (as defined) in respect of a proposed scheme of arrangement and associated orders. At the first Court hearing in these proceedings on 14 August 2024, I made orders that APM convene that meeting for the reasons set out in my judgment in Re APM Human Services International Ltd [2024] NSWSC 1095 ("First Judgment"). 2. By way of background, APM is an international health and human services provider which is listed on Australian Securities Exchange ("ASX") and operates in some eleven countries, delivering employment, health and well-being, communities and assessment and disability and aged care support services. On 3 June 2024, APM announced to ASX that it had entered into a scheme implementation deed ("SID") with Ancora BidCo Pty Ltd ("Ancora BidCo"), which is a wholly owned indirect subsidiary of funds managed and advised by Madison Dearborn Partners LLC ("MDP"). The SID provides for Ancora BidCo to acquire all of the issued share capital of APM (other than shares already held by Ancora BidCo's affiliates) by a scheme of arrangement. The proposed scheme provides for a cash consideration of $1.45 per APM share or, alternatively, options for APM shareholders to receive either 90% of the consideration in unlisted shares in an intermediate holding company ("Ancora TopCo") and the remaining 10% as cash consideration, or all of the consideration in unlisted shares in Ancora TopCo instead of cash. The scrip alternative is subject to a Scaleback Mechanism (as defined in the SID) which applies to both the all scrip and mixed consideration alternatives, with the result that the total number of scheme shares for which scrip consideration is paid will not exceed 65% of the total scheme shares. If the Scaleback Mechanism applies, APM shareholders who had made a valid election to receive the scrip alternative will receive cash consideration instead of shares in Ancora TopCo for their relevant proportion of scheme shares. If APM shareholders do not elect to receive either the cash consideration or one of the scrip alternatives, they will receive the cash consideration by default. 3. The proposed scheme as subject to conditions precedent including that APM shareholders (other than Excluded Shareholders) pass a resolution for the purposes of item 7 of s 611 of the Corporations Act 2001 (Cth) ("Act") approving the transfer of the APM shares held by each Excluded Shareholder to Ancora TopCo (to be subsequently transferred on to Ancora BidCo) on implementation of the scheme ("Item 7 resolution"). The scheme would only proceed if the Item 7 resolution was passed by the required voting majority, 50%, of APM shareholders. Another condition precedent to the scheme was that Key Rolling Shareholders (as defined in the SID) including APM's Executive Chair, Ms Wynne, and her related parties, the Group Chief Executive Officer, Mr Michael Anghie, and key management personnel, elect to receive the all scrip consideration for all of their scheme shares ("Rollover Condition"). It is proposed that APM will delist from the ASX following implementation of the scheme. 4. The scheme meeting was held on 18 September 2024 and APM shareholders approved the scheme by a majority in number of APM shareholders present and voting and by more than 75% of the votes cast, with 513,941,680 votes (99.94%) in favour of the scheme and 327,709 votes (0.06%) against and 404 shareholders present and voting in favour of the scheme (91.82%) and 36 shareholders (8.18%) voting against. 5. At the second Court hearing, APM now seeks orders approving the scheme. I made those orders at the conclusion of the second Court hearing on 25 September 2024. These are my reasons for making those orders, and I have drawn on the helpful submissions of Mr Williams, with whom Ms Ng appears for APM, in this judgment.