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The Advisory Board Exploring Strategic Alternatives, Including Possible Sale

February 8, 2017
by Heather Landi
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Washington, D.C.-based healthcare research and consulting firm The Advisory Board Company announced that its board and management team had begun an evaluation process to explore potential strategic alternatives to maximize shareholder value, including a sale of part or all of the company.

In a press release, The Advisory Board said the board of directors, working together with its management team and legal and financial advisors, has commenced a process to explore, review, and evaluate a range of potential strategic alternatives, which could include, among other things, “changes in the company's operations or strategy, strategic transactions such as a separation or the sale of part or all of the company, and continuing the company's current long-term business plan.”

In early January, The Advisory Board said it would cut 220 jobs, or 5.7 percent of its total workforce as part of a restructuring plan. In a company press release issued Jan. 3, the company announced details of a restructuring plan in its health care business. Company officials said the company experience “difficult health care sales environment across the second half of the year [2016], which was especially pronounced in November and December following the election, as members reassessed their strategy and path forward.”

In that press release, Advisory Board executives stated, “In its continuing effort to better align its health care resources and business strategy to meet member needs and market demand, the company is implementing a restructuring plan that is also intended to improve efficiency and future growth. As part of the restructuring plan, the company will exit certain products and services which do not fully align with its long-term strategy, including care management workflow, nursing workforce and infection control analytics, and two niche consulting practices.” By year-end 2017, the company estimated the restructuring plan would save $25 million.

According to a financial update, the company expects to report approximately $805 to $807 million in revenue for 2016, or approximately $10 to $12 million below the company's previous expectations for the year. The company expects to report in the range of $780 to $840 million in revenue for 2017.

“Our board of directors is committed to enhancing value for our shareholders, and this review is an important next step following the comprehensive restructuring initiatives we announced earlier this year,” Robert Musslewhite, chairman and CEO of The Advisory Board Company, said in a prepared statement in a press release issued Feb. 6. “While we conduct this review, we will remain focused on executing our business plan, implementing the previously-announced restructuring in our health care business, and continuing to deliver outstanding value to our members.”

In the press release, the company stated that the board has not set a timetable for the evaluation or when it expects to make any potential changes.

Goldman, Sachs & Co. and Allen & Company LLC are acting as financial advisors to the company, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor.



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