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Navigant Divests DFLT and TAS Businesses to Ankura for $470M

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Navigant Consulting, Inc. (NCI - Free Report) yesterday announced that it completed the sale of its Disputes, Forensics and Legal Technology (DFLT) segment and Transaction Advisory Services (TAS) practice to Ankura Consulting Group, LLC on Aug 24.

The deal was inked on Jun 23 and announced on Jun 25. It was valued at $470 million, 11.9 times of Navigant's adjusted EBITDA.  

Ankura is a portfolio company owned by Chicago-based private equity firm, Madison Dearborn Partners (MDP) and is engaged in business advisory and expert services.

David Tortorello, former head of Navigant's DFLT segment and Darin Buchalter, former head of Navigant's global Construction practice and Disputes & Economics practice outside the United States, will join Ankura's board of directors and executive committee.

Sale Part of Navigant’s Transformation Efforts

The sale represents a strategic business move on Navigant’s part in transforming itself from an expert-based event driven organization to a more industry focused management consulting and managed services firm. This transformation is aimed at achieving higher growth, more streamlined operations and significant capital flexibility.

Navigant expects to receive nearly $370 million of net cash proceeds from the sale (assuming payout of taxes, transaction and separation-related costs), which it plans to utilize in rewarding its shareholders through share repurchases and dividend payments and invest in strategic mergers and acquisitions and organic growth opportunities.

So far this year, shares of Navigant have gained 21.8%, significantly outperforming the 11.9% rise of the industry it belongs to.

Zacks Rank & Stocks to Consider

Currently, Navigant is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Business Services sector include CRA International , FTI Consulting (FCN - Free Report) and NV5 Global (NVEE - Free Report) . While CRA International and FTI Consulting sport a Zacks Rank #1, NV5 Global carries a Zacks Rank #2 (Buy).

CRA International, FTI Consulting and NV5 Global has an impressive surprise history with a positive earnings surprise of 38.6%, 58.3% and 12.7%, respectively.

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