John Fowler, Big4.com
July 19, 2010
We have not seen many acquisitions come through for KPMG US, but there has been growing rhetoric about the need for Big Four firms to get back into the consulting business.
See this article right from KPMG’s global site, which says….”For some time, the Big 4 accountants have been keen to make the point that they’re more than just auditors. Less than ten years ago though, three of them exited the market for consultancy services. Fast forward several years and they’re back en masse – and seemingly more assured than before.
The very factors which conspired to push them out of the market have turned on their head and are now pulling them back. Now it’s the turn of others in the market to feel the squeeze – as Aidan Brennan of KPMG Advisory explains:
As it is, the Big 4 are now back in favour and represent one of the most significant growth sectors in the consulting market. I believe this rapid turnaround is down to the fact that the market has effectively demanded the return of all the Big 4 to the consultancy space.”
So is this one of the first of KPMG’s many steps to bulk up its consulting services?
The acquisition is not big, but somewhat unusual in that a Big Four firm is acquiring a small practice from a Big Eight firm. The motives are likely a better fit in a larger-scale firm for a specialized service and the ensuing synergies. Also, it is John Veihmeyer, the new KPMG US Chairman and Chief Executive Officer’s first acquisition after taking over his new role.
The US firm, KPMG LLP acquired on July 16, 2010 the Supply Chain Advisory Services practice, 23 professionals and existing projects at select Fortune 500 companies of the US Grant Thornton LLP firm in order to strengthen KPMG’s existing restructuring services practice in the automotive, pharmaceuticals, aerospace and defense and other manufacturing industries by expanding current capabilities in financial and operational restructuring, supply chain advisory, supplier services, technology and performance improvement. The transaction also includes Grant Thornton LLP’s Vontik software system.
The two quotes below do show the intent to grow KPMG’s footprint by bringing together key capabilities and a large audit and tax client base – the classic Big Four way to jump start and grow a consulting practice.
"As the already strong demand for large scale transformation and restructuring assistance continues to grow, this acquisition helps us provide the functional breadth and depth needed by large organizations across several key industry sectors," said Mark A. Goodburn, Vice Chairman and Head of Advisory, for KPMG LLP. "It’s also consistent with our continuing strategy to build superior large-scale transformation capabilities to serve the world’s top organizations."
Drew Koecher, partner and head of restructuring for KPMG LLP concluded, "Adding these tactical, operational restructuring and supply chain skills to KPMG’s strategic market position is a great fit, at the right time. With the addition of this group, we broaden and deepen our client base and add to our already extensive advisory capabilities to serve businesses as they transform their business models to be successful in this new economy."
With buzz of acquisitions heating up in the consulting business (Booz, Kearney etc.), and Big4’s latent intentions to shore up their advisory and consulting arms, look out for more such announcements in the future.
KPMG, Grant Thornton, Supply Chain, Consulting, Acquisition, Big Four, clients