Consulting M&A Weekly Round-up (25th to 1st July, 2023)

by Laurent Thomas | Jul 3, 2023 | 0 comments

Step right up, ladies and gentlemen, for another enthralling edition of our weekly consulting mergers and acquisitions update. Buckle up for this ride, as we have quite an interesting lineup for you today.

We’re excited to discuss some recent deals that are sure to captivate your attention. Most notably, PwC’s $1 sale of its Australian government business raised a few eyebrows, and we can’t wait to unpack the intricacies behind it.

But that’s not all – we have a few other deals that we’re just as eager to dive into. As always, we’re committed to keeping you informed on all the latest industry developments, so you don’t miss a beat.

So, let’s get started!

#1. PwC to sell Australian government business for $1 to Allegro

In an effort to rebuild trust in the company’s reputation, professional services firm PwC has decided to sell off its troubled Australian government business for the lowly sum of just $1.

In a statement published very recently, PwC announced an exclusive partnership with private equity firm Allegro Funds. PwC and Allegro Funds hope to reach a legally binding agreement within one month.

If the transaction (codenamed ‘Bell’) goes through, PwC will divest approximately 20% of its business, representing an annual fee income of A$600 million (out of a total of A$3 billion). PwC Australia Chair Justin Carroll stated, “We have taken this action because it is the right thing to do for our public sector clients and to protect the jobs of approximately 1,750 talented people in our government business.”

PwC was left with few alternatives. PwC has been embroiled in one of the largest scandals in the history of Australia’s professional services industry after it was discovered that a former tax partner had shared confidential information obtained through his dealings with the federal government with other colleagues, giving PwC a competitive advantage.

If this deal goes through, Allegro will intend to set up the new firm as a corporation, and not a partnership, according to a few reports.

However, Allegro will continue to cope with the aftermath of the scandal, as the reputation of PwC’s government business has been severely damaged. While the majority of employees are currently “on the bench,” Allegro will need to find a means to quickly restore profitability, halt the current exodus, and restore morale.

As for PwC, Allegro may be the most luminous residence for them. The Australian investment group specializes in “rebuilding great businesses” and has won multiple awards for its accomplishments over the years.

#2. Young & Associates buys construction claims consultancy Guardian

Nashville-based property consulting firm Young & Associates (YA) has recently completed the acquisition of Guardian Group, a construction claims consulting firm located in Los Angeles.

Guardian Group, established in 1989, specializes in offering technical expertise to clients in industries such as surety, insurance, and law, focusing on construction, engineering, and claims investigations.

Their wide range of services includes handling surety bond claims (both contract and commercial), addressing construction defects, property and casualty claims, managing claims, providing construction and environmental advisory services.

By acquiring Guardian Group, Young & Associates significantly enhances its capabilities in areas such as technical construction, engineering, claims investigations, and claims administration.

#3. Digital consultancy xDesign ropes in growth capital from Soho

xDesign, a digital consultancy, has recently secured additional growth capital to strengthen its expansion efforts. Soho Square Capital is the investor behind this move, and their support will enable xDesign to scale its operations across Europe.

Established in 2010 by Andrews, who remains the majority shareholder, xDesign boasts a team of over 450 experts across its Edinburgh and Leeds offices in the UK. The company has forged partnerships with various major international and UK brands, including MoneySavingExpert, Yorkshire Building Society, and the Flutter Entertainment Group.

Through these collaborations, xDesign equips these businesses with the necessary skills and end-to-end digital capabilities to accelerate their digital transformation goals.

Soho Square Capital, headquartered in London, is an investment firm that allocates up to £40 million in various transactions, covering senior debt and equity. The firm has previously supported European SMEs, including the Alpine Fire Safety Group, The Churchill Group in facilities management, and Oliver James, a recruitment and consulting company.

With the backing of Soho Square’s investment, xDesign aims to expedite its expansion plans. This includes the opening of new offices both in the UK and internationally, starting with a Glasgow office led by the new Head of Scotland, Darren Dalrymple, scheduled for the summer launch.

The firm will also focus on fostering organic growth across all aspects of its business while simultaneously improving its operational structure and company culture.

#4. Rennie bolsters ESG practice with addition of Conversio

Rennie recently closed its inaugural deal, marking a significant milestone since its establishment two years ago. The company expanded its team by bringing onboard Conversio, a Brisbane-based consultancy firm.

Conversio brings specialized expertise in greenhouse gas emissions and disclosure, making it a valuable addition to Rennie. Founded in 2017 by Alexander Stathakis, Conversio has a proven track record of assisting clients with advice and technical guidance on GHG measurement, reporting, and verification.

Moreover, the firm supports clients in developing strategies for carbon offsetting, science-based target setting, and implementing emission reduction initiatives.

Conversio will integrate into Rennie’s ESG practice, which represents one of the firm’s five business lines. Alexander Stathakis will assume the role of associate director and join the senior leadership team at Rennie.

Closing Thoughts

It’s been yet another fascinating week in the world of consulting M&A, filled with exciting developments and insightful trends. We’re incredibly grateful to all of you who have been following along with us – your support and engagement mean the world to us.

Our aim has always been to provide informative and valuable coverage of the latest happenings in this space, and we hope we’ve been able to meet that objective. But as always, if we missed out on any deals, then please write to us and let us know.

We’re always committed to delivering high-quality content that keeps you in the know, so stay tuned for even more consulting M&A news in the weeks to come. Until then, cheers to all of you smart and curious folks out there!