Business consulting services provider Huron Consulting Group Inc. HURN inked a definitive agreement to divest its Huron Legal practice to Consilio, Inc., a dominant provider of eDiscovery and document review services. Huron will receive minimum gross proceeds of $112 million in cash upon closing.
The divestment is expected to close in the current quarter itself, subject to the satisfaction of regulatory obligations and other customary closing conditions.
In addition to the cash proceeds, Huron will also receive a cash post-closing payment, which is contingent upon full-year 2015 financial results and certain other adjustments per the agreement.
In light of the unit sale, the company has increased its share repurchase authorization to $125 million, which includes the $36.5 million remaining on the existing share buyback authorization. Huron intends to fund the share buyback primarily though the proceeds generated from the divestment.
Post-transaction, Huron will focus its resources in its Healthcare, Education and Life Sciences and Business Advisory segments to unlock value and generate long-term growth.
Huron’s legal business will be considered as a discontinued operation for full-year 2015, and the company updates its guidance to reflect the same. Full-year 2015 revenues from continuing operations are expected to lie in a range of $695 million to $699 million.
Huron guided non-GAAP adjusted earnings per share from continuing operations in a range of $2.96 to $3.00. Huron also expects to cut its corporate costs by roughly $11 million in alignment with the ongoing scale of its continuing operations.
The divestment is a part of Huron’s restructuring initiatives. In October, HURN closed the acquisition of cloud-based services firm Cloud62, expanding its Salesforce offerings to clients across multiple industries, including healthcare, higher education, manufacturing, retail and financial services. Huron also acquired Rittman Mead India, the India affiliate of UK based Rittman Mead Consulting Ltd. this year, boosting its enterprise performance management and analytics offerings.
Huron currently has a Zacks Rank #4 (Sell). Some better-ranked stocks that look promising in the consulting industry include Exponent Inc. EXPO, Navigant Consulting Inc. NCI and NV5 Global, Inc. NVEE, each carrying a Zacks Rank #2 (Buy).
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