The troubled Advisory Board Co. is weighing a merger with Evolent Health, a technology firm it currently invests in, according to a report by Reuters.
The Washington, D.C.-based healthcare consulting firm announced last month it is considering strategic alternatives, including a potential sale, after a difficult second half of 2016 which culminated in 5.7% of its workforce being laid off.
Evolent Health, which was founded in part by the Advisory Board in 2011, is just one of the Advisory Board's current suitors. Press Ganey is also believed to have expressed interest in the company.
Additionally, activist investor Elliot Management, which paid about $84 million for an 8.3% stake in the Advisory Board, agreed in early March not to launch a takeover of the consultancy firm.
Evolent Health and the Advisory Board declined to comment on this story. Press Ganey hadn't responded to a request for comment as of Monday afternoon.
The Advisory Board has invested nearly $20 million in Evolent Health, according to public records.
Evolent Health offers hospitals and health systems strategic tools to move to value-based reimbursement models. The company has experienced exponential growth since it went public in 2015. The company reported a 162% increase in revenue from $96.9 million in 2015 to $254.2 million in 2016.
The Advisory Board reported $803 million in revenue in 2016, which is about $10 million below previous expectations for the year. It expects to report $780 million to $840 million in revenue for 2017.