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KPMG mulls U.S. unit IPO
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August 18, 1998: 12:54 p.m. ET
Accounting firm hiring advisers to help unlock value of consulting unit
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NEW YORK (CNNfn) - Big Six accounting firm KPMG Peat Marwick is bringing in outside counsel to help unlock the value of its consulting business - a move that may lead to an initial public offering or partial sale of the business unit.
New York-based KPMG said its board of directors authorized management to hire an investment banking firm to evaluate its alternatives.
Company spokesman George Ledwith said the company hopes to hire the firm and have the results of the study back by the end of September.
"On the basis of its exceptional revenue growth rate and solid performance over the past two years, KPMG's consulting business has created tremendous value for our firm," said Stephen G. Butler, KPMG's chairman and chief executive. "We want to acknowledge the importance of our consulting business, and we therefore believe it is time to determine the most effective alternatives to capitalize on this valuable asset."
Ledwith said "obvious alternatives" for the unit include "some form of public offering, or taking on a significant investor."
The company noted, however, it has no plans to sell off its entire stake in the division, which has annual revenues of around $1.5 billion.
"The options we're considering will assure that the firm maintains both operating and ownership control over our consulting organization," Butler said. "Most importantly, we will continue to operate the consulting business as we do today."
The announcement marks the first time a private accounting partnership has considered an IPO or partial sale of its units.
The sale of a portion of the company could bring in hundreds of millions of dollars.
Butler said the additional capital could be used to cover the costs of future acquisitions.
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KPMG International
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