NEW YORK (CNNfn) - KPMG, the Big Five advisory firm whose worldwide service network stretches from Nairobi to Beijing, is said to be mulling a move to take 20 percent of its global management consulting business public. |
Such a step, reported in Thursday's Financial Times, would mark the first attempt for a professional services firm of KPMG's size and scope to put a sizable chunk of its business on the public block.
KPMG, one of the world's largest professional services firms, operates in 840 cities in 155 countries, offering an array of services from accountancy and auditing to tax advice, corporate finance and management consulting.
The latest development comes less than four months after KPMG's board of directors hired an outside counsel to evaluate alternatives that could help unlock the full potential of its U.S. consulting business, which has annual revenues of $1.5 billion.
Shortly thereafter, in September, KPMG confirmed it was considering spinning off 30 percent of the U.S. management consultancy business in an IPO that could generate hundreds of millions of dollars for the company.
A spin-off of its global management consultancy would mark a broadening of these initial IPO ambitions.
In its Thursday report, the London-based FT said a KPMG IPO would face tough regulatory hurdles and legal and fiscal barriers from both Brussels and Washington.
A senior KPMG partner, quoted by the newspaper, said, "But if we can't overcome these kinds of barriers, then nobody can."
Another senior partner said a proposal is being studied "in principle" and that a final decision is likely in the spring to early summer.
KPMG's management consultancy business reportedly posted revenue of $3 billion worldwide in 1998, a one-third increase from the previous year.
The FT said a primary stock listing would take place in New York, with the understanding that others would follow.
In September, when KPMG brought in the outside investment adviser, the firm's Chairman and CEO Stephen Butler said the consulting business has "created tremendous value for our firm."
"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," Butler said.
KPMG was formed through the link-up, in 1987, of KMG and PMI, the accounting world's first megamerger. Today, the firm has more than 85,000 partners and staff worldwide.