Advisory Board splits health and education arms in $2.6 billion sale

01 September 2017

The Advisory Board Company has confirmed it has agreed to sell its health care and education consulting businesses following pressure from activist investors Elliot Management. The sale of its health segment to Optum, part of UnitedHealth Group, was worth $1.3 billion including debt, while Advisory Board's education business will be sold separately to private-equity firm Vista Equity Partners for $1.55 billion.

Founded in 1979, The Advisory Board Company is a professional services firm that uses a combination of research, consulting and technology to improve the performance of clients in the health care and educational sectors. Following a period of scrutiny from shareholders, the firm, which saw revenue in the first quarter of 2017 fall by 3.1% on the same period last year, Advisory Board said in February it would explore options, including a sale of part or the entire company, after activist share-holders Elliott Management, who own almost a 5% stake in the company as of June 30th, said its stock was “significantly undervalued”. The firm initially hired Goldman Sachs Group and Allen & Company to work on potential plans.

Activist investors are often motivated by a desire to overhaul management by encouraging new ownership of a company. The deal that has since been brokered has subsequently seen Advisory Board become the subject of a split acquisition worth a total of $2.6 billion, with US health and insurance giants United Health Group and a private investment firm due to divvy up the spoils. Vista Equity Partners will acquire the Avisory Board’s education business for $1.55 billion.

The Advisory Board Company, Optum and Vista Equity Partners

The health consulting arm of the Washington-DC headquartered firm will meanwhile become part of UnitedHealth’s advisory practice, Optum. By way of the take-over, Optum seeks to expand its already substantial presence in the health care consulting space. Advisory Board, a company that works extensively with hospitals and other providers, adds further clout to Optum’s offering in the health sector, following the acquisition of Surgical Care Affiliates and the Optum pharmacy benefit manager.

The Advisory Board has an estimated 3,800 employees, and brings in roughly $807 million in annual revenue. The transactions will still require shareholder approval and are expected to close in late 2017 or early 2018, The Advisory Board said. Previous firms that have split to ramp up growth include in consulting Booz Allen Hamilton, that split into Booz Allen and Booz & Company in 2008. As health costs continue to ramp up world-wide, consulting in the sector is becoming a lucrative prospect. A number of healthcare conglomerates have meanwhile invested heavily in consulting solutions over the recent years. Earlier in 2017, UDG Healthcare obtained US management consulting firm Vynamic in a deal worth $22 million.

Speaking following the announcement of the two deals, the chair and CEO of The Advisory Board, Robert Musslewhite, said, “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 realising immediate value for stockholders. We believe this is the best course of action for our stockholders, members and employees.”


SQW Group purchases property-based regeneration consultancy

19 April 2019

UK consulting firm SQW Group has completed its first acquisition since it completed a management buyout in January 2019. BBP Regeneration joins the company having collaborated with SQW for more than 20 years.

Established in 1983, SQW Group now operates all over the world. Comprising SQW, Oxford Innovation, Oxford Innovation Services – one of the UK’s leading innovation centre operators – and Oxford Investment Opportunities Network, the organisation’s origins can be traced to Britain’s two ancient university cities: Oxford, through Oxford Trust founders, Martin and Audrey Wood, and Cambridge, through SQW’s work in producing The Cambridge Phenomenon.

The consultancy specialises in public policy, working with entities from the public, private and voluntary sectors to research, develop, implement and evaluate social and economic development interventions. It now employs over 250 people across regional offices in London, Oxford and Edinburgh, and provides business support to over 4,000 entrepreneurs and small businesses each year. At the start of 2019, SQW secured its independence in a management buyout, advised on by M&A experts from Liberty Corporate Finance and Penningtons Manches.

SQW Group purchases property-based regeneration consultancy

SQW has strengthened its position as a provider of services across the business spectrum with the acquisition of BBP Regeneration. Founded in 1994, the consulting firm specialises in land and property-based regeneration and growth schemes, and is a leading social and economic development consultancy. 

The two firms first worked together over 20 years ago, when SQW and BBP collaborated to develop the first Regional Economic Strategy for the South East. More recently, they developed an economic strategy for Thanet and are now working together in locations stretching from Cwmbran via Oxfordshire to London.

With the addition of BBP, SQW can now provide an integrated advisory service for organisations developing property schemes which deliver economic benefit to their local area. By joining SQW, meanwhile, BBP hopes to further enhance its ability to support clients in delivering property and place-making ambitions. 

Speaking about the deal, SQW CEO David Crichton-Miller commented, “The UK more than ever needs solutions to the challenges of places – of high streets under threat, of meeting housing delivery targets, and of both economically over-successful and economically challenged towns and cities – and the combination of SQW and BBP is uniquely suited to developing those solutions. [This deal] brings together critical and complementary services relating to places to serve our clients with leading edge and practical advice.”

Andy Smith, Director of BBP Regeneration, added, “SQW shares with BBP the same values of seeking to provide outstanding, practical, real world advice that helps get buildings built and places developed.  We greatly look forward to the opportunities that come from joining our two organisations together.”