Optum/UnitedHealth clinches $1.3 bn deal for Advisory Board’s healthcare practice

The Advisory Board consultancy group confirmed its splitup and sale, as originally reported by TTA in mid-July. The Optum data analytics/information/consultancy unit of UnitedHealth Group is acquiring the healthcare practice for $1.3 bn and the education consultancy will be purchased by Vista Equity Partners for $1.55 bn. 

According to Bloomberg, The Advisory Board has 3,800 employees and roughly $807 million in annual revenue. Reports indicate that it has served over 4,400 healthcare clients. According to the Washington Business Journal, regulatory filings show it will operate as a wholly owned subsidiary of Optum headed by Advisory Board Chairman and CEO Robert Musslewhite. As to relocation, Advisory Board spokespersons confirmed that they will still be moving into a new headquarters on New York Avenue NW, indicating that a move to Minnetonka is not imminent and that at least some of the management will stay. There is no word on relocation out of Washington for the education practice. At closing, outstanding shares of Advisory Board will convert at $52.65 per share, plus an additional amount per share based on the after-tax value of Advisory Board’s 7.6 percent stake in publicly traded Evolent Health. The deal is expected to close by early 2018.

This confirms an earlier trend of healthcare consultancies merging and cross-acquiring. In July, Dublin’s UDG Healthcare acquired Philadelphia-based healthcare consultancy Vynamic last week, gaining a US foothold, then added marketing/communications company Cambridge BioMarketing in Boston. Rumors still have publicly-traded Evolent Health as a likely acquirer or acquiree of a healthcare consultancy. WTOP, Reuters

 

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