KPMG UK has agreed to sell its restructuring unit in a management buyout backed by private equity firm H.I.G. Europe.
The Big Four firm said in a statement that it had signed an unconditional agreement to sell its restructuring unit to Interpath Advisory — a newly formed company comprising KPMG’s current UK restructuring partners backed by H.I.G.
KPMG said the sale was motivated by increasing conflicts between its audit and non-audit clients.
The sale is likely to value the unit at £400m, Sky News reported. KPMG declined to comment on the sale price.
The UK firm’s 22 partners and around 528 staff will transfer to Interpath, making it the largest independent restructuring and turnaround business in the UK.
Mary O’Connor, interim chief executive of KPMG UK, said: “This is a significant transaction for KPMG.
“As businesses across the UK pivot to new ways of working; the pace of digital transformation quickens and we focus on the transformation of our own business, this agreement will allow us to accelerate investment in our core services, enabling us to take advantage of the significant market opportunities that lie ahead.
“At the same time, it will allow the team at Interpath to serve a broader client base, explore new market opportunities and fully realise their potential.”
Interpath Advisory will be led by senior restructuring partners Blair Nimmo, Will Wright and Mark Raddan.
“This is tremendously exciting news for our business and our people and opens up enormous potential for growth,” Nimmo said. “With over 500 people based across the full breadth of the UK, Interpath Advisory will become the largest independent restructuring and turnaround business in the country.
“From the strong foundations that we’ve built over the past 50 years, we’re looking forward to building a market-leading international advisory business that is capable of servicing the largest and most complex engagements.”
Mandates for the restructuring business in recent years include advising on the administration of Intu properties, the liquidation of Thomas Cook’s retail division and the administration of Monarch Airlines.
Deloitte agreed last month to sell its UK restructuring business to CVC-backed advisory firm Teneo.
KPMG spun off its pensions arm last year in a deal backed by private equity firm Exponent.
The disposals come amid increased scrutiny of the UK audit sector and the divisions between audit and non-audit work at the Big Four firms.
The government is expected to publish a white paper shortly, setting out its ideas for reform of the sector.
KPMG was thrown into turmoil last month by the resignation of its chair and senior partner Bill Michael who stepped down after a backlash to comments he made during a virtual town hall meeting with staff.
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