Apiam Valued at $228.4M in Adamantem’s Scheme Deal with Cash and Scrip Options

Deal Overview

Apiam Animal Health Limited (ASX – AHX), a leading Australian rural veterinary services provider, has taken a significant step towards a change of ownership by entering into a binding Scheme Implementation Deed with entities controlled by Adamantem Capital Fund II. The proposed transaction involves Adamantem’s Pepper Bidco Pty Ltd acquiring 100% of Apiam’s shares through a scheme of arrangement, valuing the company at approximately $228.4 million.

The offer price of $0.87 per Apiam share represents a substantial premium of 63% over the undisturbed closing price on 15 August 2025, signaling strong confidence from Adamantem in Apiam’s market position and growth prospects.

Shareholder Consideration and Election Options

Shareholders will receive $0.87 cash per share, adjusted for any special dividend declared prior to the scheme’s implementation. Alternatively, eligible shareholders may elect to receive scrip consideration in the form of fully paid ordinary shares in Pepper Holdco, the unlisted holding company of Pepper Bidco. The scrip options include 100% scrip, or mixed cash and scrip combinations at 25% cash/75% scrip or 50% cash/50% scrip.

To maintain control and manage dilution, the total number of Pepper Holdco shares issued under the scheme will be capped at 24% of Pepper Holdco’s issued capital, with scaleback arrangements in place if shareholder elections exceed this threshold.

Governance and Board Recommendations

The Independent Board Committee (IBC) of Apiam, supported by financial and legal advisers, has unanimously recommended shareholders vote in favor of the scheme, subject to the absence of a superior proposal and a positive conclusion from an Independent Expert. Key directors, including Interim Managing Director Bruce Dixon and Non-Executive Director Vita Pepe, who collectively hold about 13% of shares, have committed to vote in favor.

Apiam’s Chairman, Professor Andrew Vizard, highlighted the attractiveness of the offer, noting the certainty it provides and the premium to recent trading prices. The proposal also reflects Adamantem’s recognition of Apiam’s strong national network and growth potential.

Regulatory and Implementation Conditions

The transaction remains subject to several conditions precedent, including shareholder approval by a 75% majority, court approval, and regulatory clearances from the Australian Competition and Consumer Commission (ACCC), Foreign Investment Review Board (FIRB), Australian Securities and Investments Commission (ASIC), and the ASX. The scheme is expected to be voted on in late January 2026, with implementation targeted for February 2026.

Adamantem has secured a call option over approximately 19.9% of Apiam shares held by founder Dr Chris Richards, with commitments to vote these shares in favor of the scheme, further strengthening the likelihood of successful approval.

Financial and Legal Framework

Funding for the cash consideration will be provided through equity commitments from Adamantem-managed funds and third-party debt financing, with no financing condition attached to the scheme. The Implementation Deed includes customary exclusivity provisions, including no-shop and no-talk clauses, and break fees of $1.65 million payable under certain termination scenarios.

Extensive warranties, indemnities, and governance arrangements are detailed in the Implementation Deed and associated documents, ensuring protections for both parties and outlining post-transaction board composition and management structures.

Next Steps and Market Implications

Apiam shareholders are not required to take immediate action but should anticipate receiving a Scheme Booklet in December 2025 containing detailed information and the Independent Expert’s Report. The upcoming shareholder meeting and regulatory reviews will be critical milestones to watch.

This transaction underscores the growing interest in the Australian veterinary services sector and highlights the premium investors are willing to pay for companies with strong regional footprints and growth potential. Market participants will be closely monitoring for any competing proposals or changes in board recommendations as the process unfolds.