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News > Deals
Accenture IPO up 5%
July 19, 2001: 12:32 p.m. ET

Former Andersen Consulting makes low-profile debut on Big Board
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NEW YORK (CNNfn) - Accenture Ltd., the world's biggest consulting firm, gained nearly 5 percent in its market debut on the New York Stock Exchange Thursday.

Accenture opened at $15.10, hit a high of $15.25 before closing at $15.17 on the Big Board.

The week's first IPO, Accenture (ACN: up $0.67 to $15.17, Research, Estimates) raised nearly $1.7 billion Wednesday when it sold 115 million shares at $14.50 each, near the top of its expected range of $13 to $15. Goldman Sachs and Morgan Stanley served as lead underwriters.

Don Luskin, CEO of Metamarket.com, spoke to CNNfn about the viability of the Accenture IPO. [349 AIFF] or [[349 WAV]

The high-profile IPO has received relatively little attention. "Nobody cares about it," said market analyst Kyle Huske, of IPO.com. "The IPO market is pretty quiet."

Accenture's small gain is connected to the poor performance of rival KPMG Consulting Inc. (KCIN: up $0.09 to $14.15, Research, Estimates) , which went public in February and rose 30 percent in its first day. KPMG shares have fallen off since, trading below its $18 offer price.

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"KPMG is the clear comparable. Most of KPMG's life as a public company has been below its offering price," Huske said.

At $2 billion, KPMG's IPO was bigger than Accenture and still managed to score a higher premium in its first day. The market for new issues was also much harder in February -- when KPMG chose to go public -- than the current period, Huske said.

With corporate results reports dominating the market, the Accenture IPO is getting lost in the shuffle. "The most interesting thing about Accenture is that it hasn't gotten much attention," Huske said. "It's really a non-event."

The Accenture IPO ranks as the sixth-largest IPO this year, behind the $2.3 billion offering from KMPG, the $1.8 billion issue from Reliant Resources Inc. (RRI: down $1.20 to $22.90, Research, Estimates) and three others, according to data from Dealogic, an investment banking firm that tracks new issues.

Accenture, with headquarters in both Bermuda and Palo Alto, Calif., provides management and technology consulting to customers such as Allianz AG (AZ: up $0.60 to $28.00, Research, Estimates), J.P. Morgan Chase & Co. (JPM: up $0.12 to $43.70, Research, Estimates), Ford Motor Co. (F: up $0.30 to $25.64, Research, Estimates) and Johnson & Johnson (JNJ: down $0.20 to $54.20, Research, Estimates) .

Accenture, formerly known as Andersen Consulting, gained its freedom from parent Andersen Worldwide last August. The company had been involved in a bitter dispute over being forced to share its profit with sister firm Arthur Andersen, the global accounting firm. Andersen Consulting changed its name to Accenture on Jan. 1 as a result of that split.

Accenture partners are not selling shares in the IPO and will hold 82 percent of the company's voting power once the offering is completed. Accenture is immensely profitable, posting $1.5 billion in operating income on $10.1 billion in revenue for the nine-month period ended May 31. graphic

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