A consultancy owned by a private-equity firm plans to buy Chicago-based Navigant Consulting for about $1.1 billion.
Guidehouse has a deal to buy Navigant, according to a statement. Guidehouse is a portfolio company of New York-based Veritas Capital.
“Following a review of strategic alternatives, including soliciting offers from a diverse group of potential strategic and financial partners, Navigant’s board unanimously agreed that a sale to Guidehouse is in the best interest of Navigant shareholders, delivering immediate and certain value at an attractive premium,” Navigant Chairman and CEO Julie Howard said in the statement. “The combination of Navigant and Guidehouse will create a powerful, global consulting organization characterized by deep industry expertise and leading technical know-how.”
The deal calls for Navigant shareholders to get $28 a share in cash, 16 percent more than yesterday’s closing price, the statement said.
After the acquisition closes, Guidehouse CEO Scott McIntyre would lead the company, the statement said. Howard has been offered a seat on the board of the combined company, according to a Navigant spokesman, and in a letter to employees Howard said the heads of Navigant’s business units will continue in their current roles.
The combined company would be headquartered in Washington, D.C., "but will continue to have a significant presence in Chicago," the spokesman said in an email.
Navigant has almost 6,000 employees, with about 500 in the Chicago office, according to the spokesman.
The combined organization would have $1.3 billion in revenue. The deal will confer “greater scale, access to new markets and access to new capital which we will reinvest in the business,” according to an information sheet given to employees. It will allow Navigant to accelerate its digital strategy, diversify the industries it serves and expand career opportunities for employees.
Guidehouse, which itself was acquired by Veritas Capital just last year, focuses on government clients, while Navigant works in the private sector. The Washington, D.C., firm has 2,000 employees and counts the departments of Defense, Homeland Security and Veterans Affairs as clients.
After Navigant sold its legal business last year, it attracted interest from “both strategic and financial partners,” Howard said in a letter to employees. But “we determined that while we have clearly been making significant progress during the past year, and could have continued to compete independently, Navigant was not moving at the pace we all wanted.”
The two companies have not decided how they will combine their brands, or if one brand will be abandoned. Executives will announce a decision about branding “in the weeks ahead,” according to the employee information sheet.
Navigant had $744 million in revenue in 2018 and $121 million in net income. It has three business units: health care, energy, and financial services advisory and compliance. Last year it sold its legal dispute business for $470 million.
Sourced from Crains Chicago Business - written by Claire ~Bushey