Huron Consulting Group (HURN) to Divest Life Sciences Business to Oliver Wyman
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Global professional services firm Huron (NASDAQ: HURN) today announced it has entered into a definitive agreement to divest its life sciences commercial and R&D strategy, pricing and market access strategy business (the “Life Sciences Business”) to Oliver Wyman. Oliver Wyman is a global management consulting firm and a business of Marsh McLennan (NYSE: MMC).
“Combining Oliver Wyman’s global focus and capabilities with Huron’s deep industry expertise will provide the scale needed to support the increasingly complex commercialization and access-related issues facing life sciences organizations,” said James H. Roth, chief executive officer of Huron.
After the close of the transaction, Huron will concentrate its resources and investments in strengthening its industry expertise and capabilities in healthcare, education and the other businesses in its Business Advisory segment. In addition, it will continue to strengthen its advanced technology offerings across all operating segments.
“As Huron looks to the future, we remain focused on developing our incredibly talented team and are committed to serving clients in the life sciences industry through our Innosight, technology and organizational transformation capabilities,” added Roth. “The sale of our Life Sciences Business will allow Huron to focus on what we believe are significant growth opportunities in our core businesses.”
On a preliminary basis, Huron anticipates that the Life Sciences Business, which is part of its Business Advisory segment, will have generated approximately 2% of total Huron revenues for the nine-month period ended September 30, 2021. Adjusted EBITDA for the Life Sciences Business, including certain corporate expenses directly related to the Life Sciences Business, is expected to be immaterial for the nine months ended September 30, 2021. These preliminary estimates are subject to change based on the Company’s third quarter accounting close process, which is ongoing. A final nine-month revenue total for the Life Sciences Business will be provided on the Company’s third quarter 2021 earnings call.
The transaction is expected to close in November 2021 and is subject to customary closing conditions. The Company currently intends to use the net proceeds from the transaction primarily to reduce borrowings, purchase shares under its current repurchase authorization, and execute strategic, tuck-in acquisitions.
Clearsight Advisors acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom, LLP served as legal advisor to the Company.
Outlook for 2021
The sale of the Life Sciences Business is not expected to have a significant impact on the Company’s previously issued full year 2021 guidance in terms of revenue, Adjusted EBITDA margin % or Adjusted EPS. Management will provide a more detailed discussion of the transaction and its 2021 outlook during the Company’s upcoming third quarter 2021 earnings call.
“Looking beyond 2021, full year 2022 revenues will reflect the impact of the sale of the Life Sciences Business. However, we do not expect any significant impact related to the sale on our Adjusted EBITDA margin % or Adjusted EPS after consideration of corporate savings related to the transaction as well as the anticipated use of the transaction proceeds,” said John D. Kelly, chief financial officer of Huron.
Third Quarter 2021 Earnings Call and Webcast
The Company will host a conference call to discuss the Company’s third quarter 2021 financial results on Tuesday, November 2, 2021, at 5:00 p.m. Eastern Time (4:00 p.m. Central Time). The conference call is being webcast by NASDAQ and can be accessed on Huron’s website at http://ir.huronconsultinggroup.com. A replay of the webcast will be available approximately two hours after the conclusion of the webcast and for 90 days thereafter.
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