Navient completes $369 million asset sale By Investing.com

Navient (NASDAQ:) Corporation (NASDAQ:NAVI), a credit management and business execution solutions company, has completed the sale of its healthcare services business, Xtend Healthcare, LLC.

The transaction closed on Thursday, September 19, 2024. Coding Solutions Acquisition, Inc. (CorroHealth) acquired the company for total consideration of $369 million. This amount includes $365 million in aggregate consideration and an estimated $4 million in working capital and other pricing adjustments.

The sale is part of Navient's strategic move to divest its business processing business interests. Financial details of the transaction were recently disclosed in an SEC filing and provide insight into the company's pro forma financial position following the sale.

The divestiture is expected to have a material impact on Navient's financials based on the unaudited pro forma condensed consolidated balance sheets as of June 30, 2024 and the pro forma condensed consolidated statements of operations for the fiscal year ended December 31, 2023 and the six months ended June 30, 2024.

Navient's decision to sell Xtend Healthcare is consistent with its broader strategy to streamline operations and focus on its core businesses. Shares of the Nasdaq Global Select Market-listed company could react to investor sentiment on this significant divestiture in the coming days.

Investors and market watchers will likely review the pro forma financial statements included with the SEC filing to assess the impact of the transaction on Navient's balance sheet and income statement. These documents provide a hypothetical view of what the company's financial position would have been if the sale had occurred at the beginning of the period presented.

The information in this article is based on the press release filed with the SEC. It should be noted that the completion of the sale represents a notable change in Navient's business structure that may have potential implications for the company's 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 and agreed to a $120 million fine.

This settlement had only a minor impact on Navient's third quarter 2024 earnings, a negative impact of $0.10 on earnings per share. TD Cowen maintained a sell rating on Navient, while Morgan Stanley maintained an equalweight rating.

Navient's move away from federal student loan administration has been noted. The federal student loan administration contract was transferred to a third party in 2021 and an agreement is in place to outsource the Federal Family Education Loan Program administration portfolio to MOHELA beginning in July 2024.

The company also announced 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 business (NASDAQ:) Xtend to CorroHealth for $365 million, and the company revised its full-year 2024 earnings per share guidance upward 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, recent market data and insights from InvestingPro provide a clearer picture of the company's financial health and future prospects. The company's market capitalization is approximately $1.77 billion, reflecting investors' valuation of the company. Despite a challenging environment reflected in a 21.16% year-over-year decline in revenue, Navient maintains a strong gross profit margin of 100%, demonstrating its ability to manage costs effectively.

A tip from InvestingPro highlights that Navient's management is actively buying back shares, signaling confidence in the company's value and future. Another tip points out that Navient has paid dividends continuously for 14 consecutive years and currently yields 4.0%, which could be of interest to income-seeking investors. For those who want to dig deeper into Navient's finances, InvestingPro offers additional tips. Six more are available that can further assist investment decisions.

With an adjusted P/E ratio of 9.61, the company has a potentially attractive valuation relative to earnings. As the market processes the impact of the recent divestiture, Navient's commitment to profitability, as demonstrated by its positive net income over the last twelve months, remains an important consideration for investors. For a more comprehensive analysis, interested parties can find additional insights and metrics on InvestingPro's platform.

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