The Advisory Board Co. (NASDAQ: ABCO) watched its shares make a handy gain on Tuesday after the firm announced that it had entered into a definitive merger and purchase agreement. Specifically, the company intends to sell its health care business to Optum and its education business to affiliates of Vista Equity Partners.
According to deal, stockholders would receive an estimated cash per share of $54.29, which includes a fixed amount of $52.65 per share and the after-tax value at closing of the company’s 7.6% stake in Evolent Health.
The total merger transaction value, including the after-tax proceeds for the sale of the education business, is roughly $2.58 billion.
Prior to the closing of the merger of the health care business with Optum, affiliates of Vista will acquire the company’s education business, including Royall & Company, for $1.55 billion, subject to customary adjustments. The health care business will then merge with Optum for $1.3 billion, including the assumption of The Advisory Board’s debt.
Robert Musslewhite, board chair and chief executive of The Advisory Board, commented:
Our board of directors and executive leadership team conducted a thorough review of strategic alternatives for the Company. After careful consideration, we determined that transactions with Optum and Vista Equity Partners allow us to accelerate the success of our health care and education businesses while realizing immediate value for stockholders. We believe this is the best course of action for our stockholders, members and employees, and is a testament to our employees’ commitment, dedication and hard work in executing our plan and continuing to deliver outstanding value to our members.
Shares of the Advisory Board were last seen up over 6% on Tuesday $52.98, with a consensus analyst price target of $51.88 and a 52-week range of $24.85 to $59.50.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.