Fundamental Analysis of Navigant Consulting, Inc. (NCI) Stock: A Post-Acquisition Conclusion
An essential prerequisite for any fundamental analysis is the status of the underlying security. In the case of Navigant Consulting, Inc. (NCI), the company is no longer a publicly traded entity, rendering traditional fundamental stock analysis—such as evaluating P/E ratios, revenue growth, or debt-to-equity—obsolete for prospective public market investors.
Navigant Consulting, Inc. was acquired in an all-cash transaction in 2019, and its shares were subsequently delisted from the New York Stock Exchange (NYSE).
 |
| Fundamental Analysis of Navigant Consulting, Inc. (NCI) Stock: A Post-Acquisition Conclusion |
I. The Acquisition and Delisting of NCI
The Transaction Details
Navigant Consulting, Inc. was a global professional services firm specializing in highly regulated industries, primarily Healthcare, Energy, and Financial Services Advisory and Compliance.
Acquirer: Guidehouse, a management consulting firm backed by private equity firm Veritas Capital.
Transaction Value: Approximately $1.1 billion.
Per-Share Price: $28.00 in cash for each share of Navigant common stock.
Closing Date: The acquisition was completed in October 2019.
Stock Status: Upon closing, shares of NCI were removed from listing on the NYSE, and trading was suspended prior to the opening of business on October 11, 2019.
Impact on Shareholders
For investors who held Navigant (NCI) stock at the time of the acquisition, the fundamental outcome was straightforward: they received $28.00 per share in cash. This represented a premium of 16% over the stock's closing price just before the announcement.
II. Historical Fundamental Snapshot (Pre-Acquisition)
While no longer relevant for current investment decisions, a brief look at Navigant's pre-acquisition fundamentals helps explain the rationale for the sale and the attractive valuation.
A. Business Strategy and Segments
Navigant had previously restructured its business by selling off non-core assets (like its legal and transactions advisory business) to focus on its high-growth, industry-specific advisory services. This streamlining effort made the company a more appealing target for acquisition. The key segments were:
Healthcare: Services for providers, payers, and life sciences companies, focusing on the shift to value-based care and industry consolidation.
Energy: Consulting on regulatory compliance, operational efficiency, and emerging energy technology.
Financial Services Advisory and Compliance: Services related to regulatory requirements, risk management, and litigation support.
B. Financial Performance Leading Up to the Sale
In the quarters leading up to the announcement, NCI was exhibiting strong growth in its core segments:
Revenue Growth: The company was reporting consistent year-over-year revenue increases (e.g., up 21% in a relevant quarter).
Profitability: Adjusted EBITDA from continuing operations was showing significant improvement, indicating the success of its focused strategy.
Valuation Multiple: The acquisition price valued Navigant at a lofty multiple of its forecasted adjusted EBITDA (roughly 13.75x to 15.7x), a high valuation that reflected the quality of its specialized expertise, strong client base, and the strategic value of the merger to the acquirer, Guidehouse.
III. Conclusion for Investors
The fundamental analysis of Navigant Consulting, Inc. (NCI) stock is essentially a historical exercise.
Current investors cannot buy or sell the stock on a major exchange. The company was acquired by Guidehouse in 2019, and its stock was retired at a cash price of $28.00 per share. Any remaining trading activity under the old ticker is typically residual, illiquid transactions related to settling the merger terms.
In sum, NCI is a ceased equity, and all fundamental analysis points to the success of its final corporate strategy: achieving a premium, all-cash sale to a strategic buyer.
0 comments:
Post a Comment