Advisory Board sells healthcare business to Optum as part of $2.58 billion deal

As part of a deal valued at $2.58 billion, The Advisory Board Company is selling its healthcare business to Optum and its education business to Vista Equity Partners.

By Erin Dietsche on August 29, 2017

In a twofold deal worth $2.58 billion, The Advisory Board Company is selling its healthcare business to Optum and its education business to Vista Equity Partners.

The Washington, D.C.-based firm provides consulting, research and technology services to healthcare organizations and educational institutions.

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Initially, Vista will acquire EAB, Advisory Board’s education business that includes Royall & Company, for $1.55 billion.

Next, the company’s healthcare business will merge with Optum in a $1.3 billion deal, which includes the assumption of The Advisory Board’s debt. In a news release, Optum CEO Larry Renfro said the transaction will give the organizations the opportunity to provide greater strategic insights and operational value to clients.

The Advisory Board Company CEO Robert Musslewhite noted in a statement:

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 healthcare and education businesses while realizing immediate value for stakeholders. 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 oustanding value to our members.

Hints of the transactions initially surfaced in July when Bloomberg reported UnitedHealth and Vista were nearing an agreement to split The Advisory Board.

The deal, which requires shareholder approval, is expected to close by the end of 2017 or in early 2018.

Photo: alexsl, Getty Images