KPMG, the professional services firm, today confirms that it has signed an unconditional agreement to sell its market-leading UK Restructuring practice to Interpath Advisory, a newly-formed company which is backed by H.I.G. Europe, the European affiliate of H.I.G. Capital, LLC, a leading global alternative investment firm and KPMG UK’s current Restructuring partners.
The decision to sell the business was driven by the significant changes in the Insolvency and Restructuring market in the UK over recent years. The increasing number and unique complexity of multiple stakeholders in distressed and stressed situations has made the navigation of conflicts of interest ever more complex for Big 4 firms like KPMG, which have audit or non-audit relationships with almost every large and medium-sized business across the UK. With this situation only anticipated to intensify in the future, and with such developments likely limiting the growth of the firm’s Restructuring business, the decision to commence a sale process was taken last autumn.
Mary O’Connor, interim Chief Executive of KPMG UK, said: “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.”
On completion of the deal, KPMG UK will continue to provide all other advisory services, including Debt Advisory.
The sale will see 22 partners and circa 528 staff currently employed in KPMG’s UK Restructuring practice transfer to Interpath Advisory, making it the largest independent restructuring and turnaround business in the UK.
In addition, the Restructuring practice’s dedicated pensions covenant advisory practice which provides independent advice to trustees and sponsoring employers of pension schemes will transfer to the new company.
Over the past 50 years, KPMG’s Restructuring practice has built a strong reputation for delivering innovative approaches to complex restructuring problems, such as pioneering the use of company voluntary arrangements and taking the first appointment of the special administration regime introduced for insolvent financial institutions. In recent years, it has advised on some of the UK’s most high-profile engagements, including the administrations of intu properties plc; the liquidation of Thomas Cook’s retail division; and the administration of Monarch Airlines.
Interpath Advisory will be led by Blair Nimmo, Will Wright and Mark Raddan, who have also led the transaction as three of the senior partners in KPMG’s UK Restructuring practice.
Blair Nimmo said: “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.”
This transaction only relates to KPMG’s UK Restructuring business. For the avoidance of doubt, the sale does not affect the firm’s Insolvency and Restructuring business in Ireland, which includes Northern Ireland.
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KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff. The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.
KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 147 countries and territories and has more than 219,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.