As part of its reorganisation due to audit reforms, KPMG has completed the sale of its UK restructuring practice, now known as Interpath Advisory, to H.I.G. Capital, LLC
The sale of the business sees around 528 staff and 22 partners transferring to Interpath Advisory and will enable KPMG to accelerate its programme of investment in its core audit, tax, deals and consulting services for clients.
The professional services firm announced in March that it had sold its UK restructuring business to investment firm H.I.G Capital.
H.I.G Capital is a global alternative investment firm with over €35bn (£30bn) of equity capital under management and invests in the long-term growth of consulting and professional services businesses across Europe and the US.
KPMG’s decision to sell the business was driven by the significant changes in the insolvency and restructuring market in the UK over recent years. It also comes ahead of reform of UK audit rules, which will see the largest audit firms forced to split off their audit arms to ensure independence.
Jon Holt, chief executive of KPMG UK, said: ’This is the best possible result for both KPMG and the restructuring business. It will enable us to accelerate our investment in our core services and take advantage of the significant market opportunities ahead of us.
‘Throughout this process, a key priority has been to ensure the stability and future success of the restructuring business and its talented people. This deal will help the team at Interpath to do just that, whilst giving them the opportunity to serve a broader client base and realise their full growth potential. We wish them every success in the future.’
KPMG also stated that another reason for the sale was that the number of intricate cases of multiple stakeholders in distressed and stressed situations was likely to increase and had made the navigation of conflicts of interest ever more complex for the Big Four firm, which has audit or non-audit relationships with almost every large and medium-sized business across the UK.
With these situations likely to intensify and developments likely to limit the growth of the firm’s restructuring business, the decision to commence a sale process was taken in autumn 2020.
In February 2021, Deliotte UK sold its restructuring services business to the global CEO advisory firm Teneo ahead of the audit reforms.