Published: Sat, January 07, 2017
Medical | By Garry George

Arlington's CEB to be acquired in $2.6B deal

Information-technology research firm Gartner Inc. announced on Thursday that it had agreed a deal with CEB take over the research and advisory company. Gartner will also inherit c.$0.7bn in CEB net debt, giving the deal a total enterprise value of c. $3.3bn.

The deal between Gartner Inc and CEB Inc. has been unanimously approved by both companies' Board of Directors.

"Our highly complementary business models will create the leading global research and advisory company for all major functions in the enterprise, " said Gene Hall, CEO of Gartner.

"They (Gartner) are buying a company that clearly has some issues in terms of slower growth... so it looks like the initial reaction isn't favorable obviously like the management would have hoped", BMO Capital analyst Jeffrey Silbert said".

The deal will broaden Gartner's research business through the addition of CEB's services, which include research and analysis related to human resources, sales, finance and the law.

The two companies employ more than 13,000 people with clients in more than 100 countries.

The combined company's reported results for the 12 months that ended September 30, 2016 included approximately $3.3 billion in revenue, $693 million in adjusted earnings before interest, taxes depreciation and amortization and $463 million in free cash flow.

"Similarly, we will introduce CEB's best practice and talent management insights to Gartner clients worldwide". The transaction may undervalue the Company and would result in a loss for many CEB shareholders. CEB - previously known as the Corporate Executive Board - has traditionally focused on serving large companies.

According to Gartner, the acquisition can help CEB grow by leveraging Gartner's practices and global scale.

Gartner Inc (NYSE:IT) stock was down on Thursday following its announcement of plans to purchase CEB Inc.

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