The UK wing of KPMG has signed an agreement with H.I.G. Europe to sell its UK restructuring practice. The move will see the practice repackaged as an independent business, under the name Interpath Advisory.
Following months of speculation, a deal has finally been brokered to enable a £400 million carve-out of KPMG’s restructuring wing. The size and scale of the Big Four member means that the move has created the largest independent corporate turnaround firm in Britain.
Backed by H.I.G. Europe, the European affiliate of investment firm H.I.G. Capital, Interpath Advisory will be led by KPMG UK’s current top restructuring partners, Blair Nimmo, Will Wright and Mark Raddan. In total, the news sees 22 partners and circa 528 staff currently employed transfer from KPMG to Interpath – though it only applies to KPMG’s UK business. The sale does not affect the firm’s Insolvency and Restructuring business in Ireland, which includes Northern Ireland.
Blair Nimmo said of the deal, “This is tremendously exciting news for our business and our people and opens up enormous potential for growth. 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 decision to sell the business was driven by the significant changes in the Insolvency and Restructuring market in the UK over recent years. Most prominently, the nation’s audit watchdog the Financial Reporting Council (FRC), effectively banned the foursome from conducting advisory work for audit clients in the wake of a number of accounting scandals.
This split left many in the Big Four firms feeling the conflicts issue would inhibit the future growth of restructuring operations for as long as they are owned by them – even as the demand for restructuring continues to spike across Britain – leading them to consider cashing out.
Mary O’Connor, interim Chief Executive of KPMG UK, commented, “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.”