APM Human Services is set to assume control of collapsed NDIS services provider Therapy Focus, after creditors approved a proposal that ensures they are repaid in full.
APM Human Services is set to assume control of collapsed NDIS services provider Therapy Focus, after creditors approved a proposal that ensures they are repaid in full.
At a meeting this morning, creditors of Therapy Focus voted to implement APM’s deed of company arrangement, which will see them get repaid 100 cents in the dollar.
APM’s DOCA was backed in by McGrathNicol administrators Rob Kirman and Rob Brauer, after their sales campaign attracted 64 bids from interested parties, including one from Brightwater Care Group.
Perth founded but global operator APM has pledged to fully repay creditors, retain all 250 staff and keep all of Therapy Focus’ 14 branches open across Western Australia.
Priority creditors, being employees, are owed $3.4 million while unsecured creditors are owed $4.3 million, taking the total creditor debt to $7.7 million, the administrators' report outlines.
Creditors are set to be repaid through the $2.6 million APM tipping on top of the $5.2 million Therapy Focus had in the bank at the time of its demise.
Therapy Focus tumbled into trouble in early October, citing sustained financial pressures and industry headwinds, in particular changes to NDIS pricing settings.
The company had recorded annual losses since FY22, with 90 per cent of its revenue derived from delivering NDIS services.
In July, the federal government's National Disability Insurance Agency introduced significant changes to NDIS pricing, rules and mechanisms for disability support.
In handing down their reasons for demise in the administrators’ report, the directors described the NDIS therapy pricing as insufficient to fund the cost of therapy services with no ability for them to increase prices to improve profitability,
Therapy Focus also unsuccessfully appealed to the state and federal government to address the NDIS challenges, seek debt forgiveness and negotiate financing assistance.
It’s largest company in a string of Western Australian NDIS and social services providers to call in insolvency practitioners, all of which cited pricing mechanism challenges.
Buyer APM was recently privatised after it was bought by US-based Madison Dearborn Partners’ under a $1.3 billion acquisition, after a turbulent ending to its time on the ASX.
The employment and therapy-based support services business delivered an improved revenue result of $2.6 billion for FY25, up 13 per cent per cent from the prior year.
APM founder Megan Wynne and chief executive Michael Anghie continue as directors of APM post-merger and maintain a shareholding.
