HIG Group acquires KPMG's restructuring practice

KPMG has signed an "unconditional agreement" to sell its UK restructuring practice to Interpath Advisory, a newly-formed company backed by H.I.G Europe.

As part of the sale, KPMG's Restructuring practice's dedicated pensions covenant advisory practice will also transfer to the new company.

In addition to this, 22 partners and around 528 staff currently employed in KPMG’s UK restructuring practice will transfer to Interpath Advisory, reportedly creating the "largest independent restructuring and turnaround business in the UK".

KPMG stated that the sale was driven by “significant changes” in the insolvency and restructuring market in the UK.

In particular, the company said that the increasing number and unique complexity of multiple stakeholders in distressed situations has made the navigation of conflict of interest “ever more complex” for 'Big 4' firms such as KPMG, which have audit or non-audit relationships with “almost every large and medium-sized business across the UK”.

It also argued that this situation is expected to "intensify" in the future, with concerns that such developments would likely limit the growth of the firm’s restructuring business prompting the decision to commence the sale process in autumn 2020.

Following the completion of the deal, Interpath Advisory will be led by Blair Nimmo, Will Wright and Mark Raddan, all of whom have led the transaction in their roles as senior partners in KPMG’s UK Restructuring practice.

Nimmo has highlighted the transaction as "tremendously exciting news", which will open up the business to "enormous potential for growth.

He continued: “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.”

KPMG interim chief executive, Mary O’Connor, also described the acquisition as a "significant transaction" for KPMG, emphasising that it will allow the company to "accelerate" investment in core services.

“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," she stated.

“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 will continue to provide all other advisory services, including debt advisory.

The sale will also not affect the firm’s insolvency and restructuring business in Ireland, including Northern Ireland.

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