Activist investor Elliott Management has agreed not to launch a takeover or fight for board seats at the Advisory Board Co. while the healthcare consultancy and technology company explores strategic alternatives, including a possible sale.
The stand-still agreement announced on March 1 means Elliott Management and its leader, Paul Singer, won't nominate a dissident slate of directors for the board of the Advisory Board when the company holds its annual meeting later this year.
The Advisory Board provides research, technology and consulting services to healthcare companies and educational organizations. Its healthcare business is about 80% of annual revenue, which totaled $803.4 million in 2016.
A spokesman for the Advisory Board declined to comment on Monday.
Elliott burst on the scene at the Advisory Board in January when the hedge fund declared the company was underperforming and disclosed that the fund had acquired an 8.3% stake of company shares. In a U.S. Securities and Exchange Commission 13D filing, which connotes activist intent to get involved in governance, Elliott said it had spent about $84 million for that stake.
Shortly thereafter, the Advisory Board announced the strategic review in conjunction with Goldman Sachs and Allen & Co. The company also announced plans in January to lay off 220 employees, or 5.7% of its workforce.
For the fourth quarter of 2016, the Advisory Board posted net income of $37.2 million on revenue of $203.9 million compared with a net loss of $105.3 million on revenue of $205 million.
The improved fourth-quarter performance includes a $20.1 million net-of-tax gain from its investment in Evolent Health.