Gartner Inc (NYSE:IT) stock was down on Thursday following its announcement of plans to purchase CEB Inc. (NYSE:CEB) for $2.8 billion.
The deal will have Gartner Inc paying the $2.6 billion for CEB Inc. with a mixture of cash and stock. The deal will give CEB shareholders $54 in cash and 0.2284 shares of IT stock for each CEB share that they own.
The offer from Gartner Inc to CEB Inc. has a total value of $77.25 per share. This represents a 31% premium to CEB’s volume weighted average closing stock price over the last 30 days. The deal will have IT shareholders owning 91% of the combined company and CEB shareholders owning the other 9%.
Gartner Inc says that the acquisition of CEB Inc. will be immediately accretive to its adjusted earnings per share. It also expects the acquisition to be accreative into the double digits in 2018.
“Associates will benefit from expanded career opportunities as part of a larger, strong organization with the most extensive client offering in the industry,” Gene Hall, CEO of Gartner Inc, said in a statement. “We remain focused on delivering tremendous value to our clients, capturing our vast market opportunity and continuing our trend of driving consistent double-digit growth in revenue, earnings and free cash flow.”
The deal between Gartner Inc and CEB Inc. has been unanimously approved by both companies’ Board of Directors. It is expected to close during the first half of 2017. It still needs approval from CEB shareholders, as well as from regulators.
IT stock was down 8% and CEB stock was up 21% as of Thursday afternoon.
