Therese Rein sells Ingeus
The wife of former Prime Minister Kevin Rudd Therese Rein, has struck a deal with the Nasdaq-listed Providence Service Corporation that could see her personally earn up to $US140 million ($151 million) in cash and shares.PT1M35S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-35vk1 620 349 April 1, 2014
Therese Rein is due a multimillion-dollar payday after selling her multinational jobseeker company Ingeus to a US employment firm in a deal worth as much as $US206 million ($222 million).
The wife of former Prime Minister Kevin Rudd has struck a deal with the Nasdaq-listed Providence Service Corporation that could see her personally earn up to $US140 million ($151 million) in cash and shares if certain performance targets are met.
According to a statement released on Tuesday morning by Providence, Ms Rein has agreed to stay on as managing director of Ingeus for at least five years as part of an "earn out" with management.
Cashed up: Therese Rein was 199th on the BRW Rich List in 2013. Photo: Andrew Meares
Ms Rein joined the BRW Rich list in 2013 (in 199th position) with an estimated fortune of $210 million. She fell off the following year but the deal with Providence suggests she remains one of the wealthiest woman in Australia.
"Providence will provide the financial underpinning and complementary knowhow that will enable us to fully achieve our goals," Ms Rein said in a statement.
Providence has agreed to buy 100 per cent of parent company Ingeus, which is 95 per cent owned by Ms Rein, and its British division, which is 50 per cent owned by accounting firm Deloitte.
Kevin Rudd and Therese Rein. Photo: John Woudstra
Ingeus, which relies on government contracts, earns about 70 per cent of its revenue in the United Kingdom and Deloitte has been looking to sell its stake for about six months. Ingeus sold its Australian operations in 2007 in the lead up to Mr Rudd's federal election victory. "It would not be sensible for my company to receive even one dollar of a federal government budget if Kevin was elected prime minister," Ms Rein told The Courier Mail at the time.
Ingeus is one of 18 firms contracted by the British government to find work for the long-term unemployed as part of the Prime Minister David Cameron's Work Programme welfare to work policy. Work placement is not considered "core business" by Deloitte, which may have also been put off by the political debate surrounding the Work Progamme.
The BBC has reported that some contractors were not making money from the programme, with some companies bidding for contracts offered discounts of 30 per cent and more on the Department for Work and Pensions' suggested price.
Rival company A4E last year was accused of offering the unemployed unpaid work in its own offices while leaked emails also showed Ingeus UK had missed some of the targets it was set to meet.
Nevertheless, Ms Rein could make millions if Ingeus clears performance hurdles under its new ownership.
Providence will acquire Ingeus for $US58 million in cash up front as well as a second $US23.7 million payment of restricted stock and cash (subject to a vesting schedule of four years). It is understood Deloitte will collect the bulk of the cash payment. Providence could also pay Rein and other managers up to $US124 million in the form of earn-out payments over five years.
Ingeus generated "adjusted" operating earnings for the twelve months ended December 31 of $US56 million. and GBP £34 million.
"Ingeus is a good match for Providence, with strong management, deep client relationships and a proven track record of delivering high-quality services," said Providence CEO Warren Rustand.
Adjusted EBITDA has grown at compounded annual growth rates of 18.7 per cent over the last three years, according to a statment.
Investment bank Investec and law firm Herbert Smith Freehills advised Ingeus.