Advantage Solutions sells Strong Analytics to OneSix, marking another step in its business simplification
Advantage Solutions (NASDAQ: ADV) announced the sale of Strong Analytics to OneSix on June 10, 2024, a move aimed at simplifying its business portfolio. Acquired in 2021, Strong Analytics specializes in custom software solutions for the pharmaceutical, marketing, and hospitality sectors, which are outside Advantage's core focus on retailer and consumer packaged goods clients. The terms of the sale, concluded on June 7, remain undisclosed. The transaction is part of Advantage's broader strategy to concentrate on core capabilities, improve its balance sheet, drive productivity, and fuel growth. The company plans to use the majority of the sale proceeds to reinvest in its business and reduce its debt, aiming for a net-debt-to-adjusted-EBITDA ratio below 3.5 times. Recent similar transactions include the sales of Adlucent and The Data Council.
- Sale aligns with Advantage's strategy to focus on core capabilities.
- Proceeds from the sale will be used to reduce debt and reinvest in the business.
- Transaction supports the company's goal of achieving a net-debt-to-adjusted-EBITDA ratio below 3.5 times.
- Builds on recent successful transactions, indicating a consistent approach to portfolio simplification.
- Terms of the sale are undisclosed, creating uncertainty regarding financial impact.
- Potential loss of revenue from the divested Strong Analytics, which served significant sectors like pharmaceuticals, marketing, and hospitality.
Insights
The sale of Strong Analytics by Advantage Solutions to OneSix indicates a strategic initiative to refocus on core capabilities and streamline operations. This move aligns with the company's broader plan to simplify its portfolio, enhancing operational focus and efficiency. For retail investors, it's significant to note that the proceeds from this sale will be directed towards reducing debt and reinvesting in the business. Specifically, the company aims to achieve a net-debt-to-EBITDA ratio of less than 3.5 times, indicating a push towards financial stability and growth potential. This ratio is a key metric in assessing the company's leverage and financial health. Such moves are generally viewed positively as they aim to strengthen the balance sheet and improve investor confidence. However, without the disclosed terms of the sale, it's challenging to assess the immediate financial impact on the company's earnings.
The divestiture of Strong Analytics, a key player in data science services, reflects Advantage Solutions' shift away from tech-driven services that are not directly aligned with its core retail and consumer packaged goods sectors. This repositioning could be viewed as a strategic realignment to enhance focus and resource allocation towards areas of direct impact and expertise. For tech investors, this move might signal a decreased emphasis on tech innovation within Advantage Solutions, potentially limiting its future technological advancements. On the other hand, OneSix's acquisition of Strong Analytics could bolster its capabilities in data engineering and technology, enhancing its overall market proposition. Investors should consider how this transition aligns with broader industry trends and the evolving landscape of tech-driven solutions in various sectors.
ST. LOUIS, June 10, 2024 (GLOBE NEWSWIRE) -- Advantage Solutions Inc. (NASDAQ: ADV), a leading business solutions provider to consumer goods manufacturers and retailers, today announced it has sold Strong Analytics, a designer and developer of custom software solutions, to OneSix.
Terms of the sale, which closed June 7, were not disclosed.
Strong Analytics, which Advantage acquired in 2021, provides a range of data science services primarily to brands in the pharmaceutical, marketing and hospitality industries. A substantial majority of the brands Strong serves fall outside of Advantage’s core retailer and consumer packaged goods clients.
As part of the sale, Strong will fold into OneSix, a Chicago-based data engineering and technology company.
“As we continue to execute on our strategy to simplify our business, this transaction represents another step in sharpening our focus on our core capabilities,” said Advantage Solutions CEO Dave Peacock. “We thank the Strong Analytics team for their contributions and wish them the best in their future endeavors with OneSix.”
The sale advances Advantage’s broader growth acceleration plan, which includes efforts to simplify its portfolio — enabling greater focus on the company’s core capabilities while creating the capacity to strengthen its balance sheet, drive productivity and fuel growth.
The company intends to use the majority of proceeds from the transaction to reinvest in its business and reduce its debt as it continues to progress toward its target of achieving a net-debt-to-adjusted-EBITDA ratio of less than 3.5 times.
Today’s sale builds upon a series of transactions completed in recent months, including two deals completed last month: the sale of digital media agency Adlucent and the sale of content management platform The Data Council.
About Advantage Solutions
Advantage Solutions is a leading provider of outsourced sales, experiential and marketing solutions uniquely positioned at the intersection of brands and retailers. Our data- and technology-driven services — which include headquarter sales, retail merchandising, in-store and online sampling, digital commerce, omnichannel marketing, retail media and others — help brands and retailers of all sizes get products into the hands of consumers, wherever they shop. As a trusted partner and problem solver, we help our clients sell more while spending less. Advantage has offices throughout North America and strategic investments in select markets throughout Africa, Asia, Australia, Latin America and Europe through which the company serves the global needs of multinational, regional and local manufacturers. For more information, please visit advantagesolutions.net.
Forward-Looking Statements
Certain statements in this press release may be considered forward-looking statements within the meaning of the federal securities laws, including statements regarding the expected future performance of Advantage's business and projected financial results. Forward-looking statements generally relate to future events or Advantage’s future financial or operating performance. These forward-looking statements generally are identified by the words “may”, “should”, “expect”, “intend”, “will”, “would”, “could”, “estimate”, “anticipate”, “believe”, “predict”, “confident”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.
These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Advantage and its management at the time of such statements, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, market-driven wage changes or changes to labor laws or wage or job classification regulations, including minimum wage; the COVID-19 pandemic and other future potential pandemics or health epidemics; Advantage’s ability to continue to generate significant operating cash flow; client procurement strategies and consolidation of Advantage’s clients’ industries creating pressure on the nature and pricing of its services; consumer goods manufacturers and retailers reviewing and changing their sales, retail, marketing and technology programs and relationships; Advantage’s ability to successfully develop and maintain relevant omni-channel services for our clients in an evolving industry and to otherwise adapt to significant technological change; Advantage’s ability to maintain proper and effective internal control over financial reporting in the future; potential and actual harms to Advantage’s business arising from the Take 5 Matter; Advantage’s substantial indebtedness and our ability to refinance at favorable rates; and other risks and uncertainties set forth in the section titled “Risk Factors” in the Annual Report on Form 10-K filed by the company with the Securities and Exchange Commission (the “SEC”) on March 1, 2024, and in its other filings made from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Advantage assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Media:
Peter Frost
press@advantagesolutions.net
Investors:
Ruben Mella
investorrelations@advantagesolutions.net
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