ST. LOUIS - Advantage Solutions Inc. (NASDAQ: ADV), a prominent provider of outsourced sales and marketing solutions, has completed the sale of Strong Analytics to OneSix, a Chicago-based technology firm. The transaction, which was finalized on Monday, aligns with Advantage's strategy to streamline its operations and concentrate on its primary business offerings.
Strong Analytics, a company specializing in data science services for the pharmaceutical, marketing, and hospitality sectors, was acquired by Advantage in 2021. However, the majority of Strong's clientele does not overlap with Advantage's main consumer packaged goods and retailer segments. With the sale, Strong Analytics will be incorporated into OneSix's operations.
Advantage Solutions CEO Dave Peacock expressed gratitude to the Strong Analytics team for their contributions and extended best wishes for their future with OneSix. Peacock emphasized that the divestiture is a step towards focusing on Advantage's core capabilities.
This move is part of Advantage's broader initiative to accelerate growth by simplifying its portfolio, which allows the company to invest more in its business, improve its balance sheet, and enhance productivity. The proceeds from the sale are expected to be used predominantly for business reinvestment and debt reduction, in pursuit of a net-debt-to-adjusted-EBITDA ratio below 3.5 times.
The offloading of Strong Analytics follows a pattern of recent divestments by Advantage, including the sale of digital media agency Adlucent and content management platform The Data Council last month.
Advantage Solutions, headquartered in North America with strategic investments across several continents, offers a range of data- and technology-driven services. These services are designed to help brands and retailers efficiently reach consumers across various shopping channels.
The press release also included cautionary statements about forward-looking information, which are subject to risks and uncertainties that could cause actual results to differ from those projected.
The details of the sale, including financial terms, have not been publicly disclosed. This development is based on a press release statement from Advantage Solutions.
In other recent news, Advantage Solutions has reported steady growth in its first quarter of 2024, posting revenues of $771 million and an adjusted EBITDA of $79 million. The company's performance comes despite challenges such as client exits, higher costs, and wage inflation, showing its resilience and strategic approach.
Advantage Solutions further revealed new reporting segments: Branded Services, Experiential Services, and Retailer Services. The company managed to reduce its debt by $51 million and repurchased shares, demonstrating a robust strategy to streamline its business operations.
Moreover, Advantage Solutions is investing in AI and data visualization tools, highlighting its commitment to technological advancement. The company also announced the sale of Adlucent as part of its strategy to optimize the capital structure.
Despite not providing specific growth guidance for Experiential Services, the executives expressed optimism for 2024. These developments are part of the company's broader strategy to simplify its business, optimize its cost structure, and maintain its trajectory of growth.
InvestingPro Insights
In light of Advantage Solutions Inc.'s (NASDAQ: ADV) recent divestiture of Strong Analytics, the company's financial health and future prospects remain a focal point for investors. According to InvestingPro data, Advantage Solutions boasts a market capitalization of $972.98 million, indicating its significant presence in the industry despite recent asset sales. The company's stock price has experienced notable volatility, with a 1-month price total return showing a 13.96% decline, reflecting investor reactions to its strategic moves and market conditions.
InvestingPro Tips highlight that analysts have revised their earnings forecasts downwards for the upcoming period, suggesting that there may be concerns regarding the company's short-term profitability. However, it is noteworthy that analysts predict the company will be profitable this year, which aligns with the company's focus on streamlining operations and investing in its core business. This strategic shift could potentially lead to improved financial performance in the long run.
Investors looking to delve deeper into Advantage Solutions' financials and future outlook can find a wealth of additional InvestingPro Tips at https://www.investing.com/pro/ADV. For those considering an InvestingPro subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more expert analysis and tips.
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