NEW YORK (CNNfn) - KPMG Consulting Inc. raised the number of shares it plans to sell in its initial public offering to 367 million from 324 million, the firm said in a filing with the Securities and Exchange Commission Monday.|
The consulting firm and its parent, KPMG LLP, changed the distribution of shares they are contributing. KPMG Consulting cut the number of shares it plans to offer to 59.2 million from 89.3 million, while KPMG LLP raised the number of shares it is selling to 307.9 million from 235 million.
KPMG Consulting kept the price range of the expected IPO at $6.75 to $8.75 a share. Morgan Stanley Dean Witter is lead underwriter on the deal.
After the IPO, KPMG Consulting Inc. will no longer be part of KPMG International, the global association of professional services firm that operate under the KPMG name.
In January, the McLean, Va.-based KPMG Consulting announced it was splitting with parent KPMG LLP, one of the so-called big five accounting firms, which includes PricewaterhouseCoopers, Deloitte & Touche, Arthur Andersen and Ernst & Young. In May, KPMG Consulting filed for an IPO valued at $1 billion, marking the first time a unit of the big five has filed to go public.
Four year limit on KPMG name
As part of the deal, KPMG Consulting agreed that it will not provide tax or assurance services for a five-year period. KPMG Consulting has rights to use the KPMG name for up to four years following the IPO.
After the IPO, parent firm KPMG LLP, the non-U.S. member firms operating under the KPMG International umbrella and their partners, will own no more than 19.9 percent of the consulting unit. KPMG LLP and KPMG International, as well as related partners, have agreed to sell all shares they hold within a five-year period following the offering.
Cisco Systems, which recently sold half of its shares to KPMG LLP, will hold a 9.9 percent stake in the consulting unit after the IPO.
KPMG Consulting has also agreed that it will not merge, consolidate or combine any or all of its assets with Lucent Technologies Inc. (LU: Research, Estimates), Nortel Networks Corp. (NT: Research, Estimates), Alcatel S.A. (ALA: Research, Estimates) or Juniper Networks (JNPR: Research, Estimates) until January 2005.
KPMG Consulting's IPO is significant because it comes at a time when all the big five firms are looking at other options for its consulting divisions. KPMG rival PricewaterhouseCoopers confirmed in September that it is talks with Hewlett-Packard Co. involving H-P's buy of PwC's management consulting unit for approximately $18 billion in cash and stock. Andersen Consulting has also received clearance to split from parent firm Arthur Andersen. In February, Ernst & Young sold nearly all its consulting unit to Cap Gemini, a French computer services and advisory firm, for nearly $11.3 billion.
A date for the KPMG Consulting IPO has not been set, underwriters on the deal said. The issue is expected to trade under the Nasdaq symbol "KCIN."