Advisory Board To Buy Royall For $850 Mln. - Update

(RTTNews) - Advisory Board Co. (ABCO), Wednesday said it has agreed to buy Royall & Company in a cash-and-stock deal worth $850 million.

Advisory Board will pay Royall $750 million in cash and $100 million in its stock, the Washington-based company said in a statement. Advisory Board plans to fund the cash component with borrowings under credit facilities along with about $65 million of cash on hand. Advisory Board will also issue between 2.4 million and 2.8 million shares to Royall.

Richmond, Virginia-based Royall provides strategic, data-driven student engagement and enrollment management solutions, financial aid optimization, and alumni fundraising.

"Our combination with Royall & Company, the clear leader in providing strategic, data-driven student engagement and enrollment solutions, accelerates the extension of our model into higher education and gives us a fantastic platform for growth, expansion, and member value creation," said Advisory Board CEO Robert Musslewhite.

Musslewhite said the company expects the acquisition to be accretive to its overall financial profile, enhancing growth, margins, cash flow, and adjusted earnings. Advisory Board expects the acquisition to be about $0.10 per share accretive to its calendar 2015 adjusted earnings.

The deal is expected to close in January 2015, subject to customary closing conditions.

ABCO closed Wednesday's trading at $37.76, down $0.55 or 1.44%, on the Nasdaq.