KPMG has signed an unconditional agreement to sell its restructuring practice to Interpath Advisory, a newly-formed company backed by private equity firm HIG Europe.
The sale will see 22 partners and around 528 staff currently employed in KPMG’s restructuring practice transfer to Interpath Advisory, making it the largest independent restructuring and turnaround business in the UK.
KPMG did not release the numbers on what the deal is worth, but it has long been rumoured to be in the region of £400m.
KPMG’s restructuring practice’s pensions covenant advisory practice, which provides independent advice to trustees and sponsoring employers of pension schemes, will also transfer to the new company.
The Big Four firm said it decided to sell the business because changes to insolvency and restructuring markets in the UK meant conflict of interest issues prevented firms like KPMG from Interpath Advisory growing their restructuring units.
News of the sale comes just over a fortnight after fellow Big Four firm Deloitte sold its restructuring division to PR and advisory giant Teneo.
KPMG fills senior ranks
KPMG UK interim chief executive officer Mary O’Connor said the move was significant 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.”
Newly formed Interpath Advisory will be led by Blair Nimmo, UK head of restructuring at KPMG, Will Wright, a partner in the restructuring unit and KPMG’s global head of turnaround Mark Raddan, who have also led the transaction as three of the senior partners in KPMG’s UK restructuring practice.
Blair 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.”
The firm’s restructuring business has acted as administrator to a slew of major high street casualties during the pandemic, including burger chain Byron, shopping centre-owner Intu Properties and Arcadia Group’s flagship Topshop store in London’s West End.
On completion of the deal, KPMG UK will continue to provide all other advisory services, including debt advisory. The sale does not affect the firm’s Insolvency and Restructuring business in Ireland, which includes Northern Ireland.
Soured from City AM - written by Hannah Godfrey