It's a massive week for ASX listings this week, as Friday will see the second billion-dollar company debut.
In fact, APM Human Services International Limited (ASX: APM) will start its public life with a $3.26 billion market capitalisation. That dwarfs Siteminder Limited (ASX: SDR)'s $1.36 billion valuation at the time of its listing on Monday.
The initial public offer (IPO) alone will have raised $982 million for APM Human Services.
APM is a disability services provider with headquarters in Perth. The business was established in 1994 by executive chair Megan Wynne, who will become a billionaire on Friday with her 34.2% stake.
"I started my career as an occupational therapist and it is our allied health and rehabilitation foundations that shape the way we approach working with our clients," she said in a letter to investors.
"Regardless of their circumstances, age, or stage of life, our evidence-based practice supports people to live a fulfilling life, recover from injury or illness, gain sustainable employment, or maintain their quality of life as they age."
APM shares were issued during the IPO at $3.55 each. They start trading on a conditional and deferred settlement basis on Friday, while general trading will commence Wednesday.
APM is profitable, but reliant on government programs
Although broadly labelled as a disability services provider, the company also lists "sole parents, youth, aged workers, ex-offenders, and people from culturally or linguistically diverse backgrounds" as beneficiaries of its services.
Technically, the customers are institutions, mainly government employment agencies.
The prospectus indicates the main reasons for raising $982 million are to pay off debts and provide existing investors with a liquid market to trade their shares.
APM has business spread across 10 countries, with 52.2% of its revenue coming from Australia. Europe raked in 26.8% of the 2021 financial year revenue, while North America brought in 12.5% and Asia-Pacific 8.5%.
The last financial year saw $1.03 billion of revenue come in, resulting in a net profit after tax and amortisation of $48.9 million.
"For FY22, the directors forecast that APM will generate pro forma revenue of $1.3 billion, pro forma EBITDA of $295 million and pro forma NPATA of $155 million, representing growth of 31%, 26% and 21% respectively over FY21-FY22," said Wynne.
Fund managers have reportedly been cautious about APM's float, as its business is heavily dependent on the federal government's Disability Employment Services scheme.
That program has been under fire for the underwhelming results realised in return for increasing annual costs, as detailed in a Boston Consulting Group report last year.
