Deloitte sells restructuring unit before audit reform
17 Feb 2021
Teneo, the global CEO advisory firm, has announced a major expansion of its international consulting capabilities with an agreement to acquire the restructuring services business of Deloitte UK
17 Feb 2021
Teneo is a portfolio company of funds advised by CVC Capital Partners, who are making an incremental equity investment as part of this transaction.
The transaction, which is subject to regulatory approval, further extends the range of market-leading advisory services that Teneo provides to business leaders, their boards, companies and a wide range of institutions around the world.
The divestment by Deloitte comes ahead of imminent UK legislation forcing the largest audit firms to split off their audit arms to ensure independence.
The government is expected to announce the plans for audit reform imminently.
The restructuring services business of Deloitte UK, comprising more than 250 people including 27 partners, will add specialist expertise in distressed restructuring and insolvency to Teneo’s existing advisory capabilities in management consulting, risk, strategic communications, public affairs, investor relations, capital advice, talent and executive search.
As a result, Teneo’s total headcount will increase to more than 1,100 employees.
The team joining Teneo will continue to focus on identifying the causes of underperformance, working collaboratively with key stakeholders to develop the best strategy for recovery and support implementation of the optimal solution.
Declan Kelly, chairman and CEO of Teneo, said: ‘We are delighted to welcome Deloitte’s UK restructuring team to Teneo as we strengthen our worldwide consulting capabilities. The combination of the UK’s best distressed restructuring specialists with our existing advisory expertise will reinforce and extend Teneo’s position as the world’s leading CEO advisory firm.
‘Teneo intends to use this acquisition to build a global restructuring practice leveraging our existing capabilities in the United States as well as through further M&A and organic growth.’
Daniel Butters, head of Deloitte’s UK restructuring services business, will become head of restructuring for Teneo, a new business segment that will provide a wide range of services to help clients navigate periods of financial and operational underperformance or stress.
This will draw on the proven capabilities of the team, which is structured across three primary service lines including corporate advisory, creditor advisory and insolvency.
Together with his senior leadership team of Rob Harding and Ian Wormleighton, who have together with Butters led the sale process, and the support of their 24 fellow partners, the group is excited to take the business to the next level with Teneo.
‘We are very excited to join Teneo and believe that this is the perfect home for our partners and people,’ said Butters. ‘Declan and the Teneo team share our vision to build the leading global restructuring firm. We have growth plans to scale our existing market leading business, clear support from our clients for our strategy and we believe that Teneo gives us the right platform to deliver this vision.’
Richard Houston, senior partner and chief executive at Deloitte UK, added: ‘We’re thrilled with this outcome. Our overriding priority throughout this process has been to ensure the stability and future success of the business as well as the individual progression and development of its talented partners and people. The deal offers an exciting opportunity for that, and we wish Dan and the team every success for their future journey.’
Following completion of the transaction, terms of which are not being disclosed, Teneo’s UK presence will increase to more than 600 staff in multiple advisory disciplines serving many of Britain’s largest companies and institutions. The Teneo restructuring team will operate from a network of London and regional offices, reflecting its existing national footprint.