DC consulting firm Advisory Board to be acquired, split in $2.6B deal

WASHINGTON — D.C.-based consulting firm The Advisory Board Inc. will be acquired by United Health Group Inc. and a private investment firm, and its operations will be split in two in a deal valued at almost $2.6 billion.

United Health’s health care consulting and health care delivery operation, named Optum, will get The Advisory Board’s health care consulting business. Its education business will be acquired by Vista Equity Partners.

The Optum deal is valued at $1.3 billion. The Vista Equity Partners deal is valued at $1.55 billion.

“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,” said Robert Musslewhite, chairman and CEO of The Advisory Board.

“We believe this is the best course of action for our stockholders, members and employees,” he said.

The Advisory Board has 3,800 employees, according to Bloomberg data, and roughly $807 million in annual revenue.

The Advisory Board said in February it was exploring strategic options and hired Goldman Sachs Group and Allen & Co. to work on potential plans.

The transactions require shareholder approval and are expected to close in late 2017 or early 2018, The Advisory Board said.

Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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