Navient (NASDAQ:NAVI) Corporation (NASDAQ:NAVI), a company specializing in loan management and business processing solutions, has finalized the sale of its healthcare services business, Xtend Healthcare, LLC.
The transaction was completed on Thursday, September 19, 2024, with Coding Solutions Acquisition, Inc. (CorroHealth) acquiring the business for a total consideration of $369 million. This figure includes $365 million in total consideration and an estimated $4 million in working capital and other price adjustments.
The sale is part of Navient's strategic move to divest its Business Processing segment's equity interests. The financial details of the transaction were disclosed in a recent SEC filing, providing insight into the company's pro forma financial position post-sale.
According to the unaudited pro forma condensed consolidated balance sheet as of June 30, 2024, and the pro forma condensed consolidated statements of income for the year ended December 31, 2023, and the six months ended June 30, 2024, the divestiture is expected to impact Navient's financials significantly.
Navient's decision to sell Xtend Healthcare aligns with its broader strategy to streamline operations and focus on its core business areas. The company's stock, listed on The Nasdaq Global Select Market, may see investor sentiment react to this significant divestiture in the coming days.
Investors and market watchers will likely review the pro forma financial statements attached to the SEC filing to assess the transaction's implications on Navient's balance sheet and income statements. These documents provide a hypothetical view of the company's financial position if the sale had occurred at the beginning of the period being presented.
The information in this article is based on the press release statement filed with the SEC. It should be noted that the sale's completion marks a notable change in Navient's business structure, with potential implications for its future financial performance.
In other recent news, Navient Corporation has seen significant changes in its operations. The company settled with the Consumer Financial Protection Bureau (CFPB) over a lawsuit filed in 2017, agreeing to a $120 million fine.
This settlement had a minor impact on Navient's third-quarter earnings for 2024, with a $0.10 negative impact on earnings per share. TD Cowen maintained a Sell rating on Navient, while Morgan Stanley held an Equalweight rating.
Navient's shift away from federal student loan servicing has been noted, with its federal student loan servicing contract transferred to a third party in 2021 and an agreement to outsource its Federal Family Education Loan Program servicing portfolio to MOHELA starting July 2024.
The company also declared a third-quarter dividend of $0.16 per share, demonstrating its commitment to shareholder value. Navient's restructuring efforts include the sale of its Healthcare Services (NASDAQ:HCSG) business, Xtend, to CorroHealth for $365 million, and the company updated its full-year 2024 earnings per share guidance to $1.35 to $1.55. These recent developments provide insight into Navient's ongoing transformation and financial performance.
InvestingPro Insights
As Navient Corporation (NASDAQ:NAVI) streamlines its operations with the sale of Xtend Healthcare, current market data and insights from InvestingPro provide a clearer picture of the company's financial health and future prospects. The company's market capitalization stands at approximately $1.77 billion, reflecting investor valuation of the business. Despite a challenging environment indicated by a 21.16% year-over-year revenue decline, Navient maintains a strong gross profit margin at 100%, showcasing its ability to manage costs effectively.
An InvestingPro Tip highlights that Navient’s management has been actively buying back shares, signaling confidence in the company's value and future. Another tip points out that Navient has consistently paid dividends for 14 consecutive years, with a current yield of 4.0%, which may appeal to income-focused investors. For those considering a deeper dive into Navient's financials, InvestingPro offers additional tips, with six more available that can further inform investment decisions.
With an adjusted P/E ratio of 9.61, the company presents a potentially attractive valuation relative to earnings. As the market absorbs the impact of the recent divestiture, Navient's commitment to profitability, as evidenced by its positive net income over the last twelve months, remains a key consideration for investors. For a more comprehensive analysis, interested parties can explore further insights and metrics on InvestingPro's platform.
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