KPMG has agreed to sell its UK Restructuring practice to Interpath Advisory, a newly-formed company which is backed by private equity firm H.I.G. Europe and KPMG UK’s current restructuring partners.
Interpath Advisory will be led by Blair Nimmo, Will Wright and Mark Raddan, who have also led the transaction as three of the senior partners in KPMG’s UK Restructuring practice.
“The decision to sell the business was driven by the significant changes in the insolvency and restructuring market in the UK over recent years,” said KPMG.
“The increasing number and unique complexity of multiple stakeholders in distressed and stressed situations has made the navigation of conflicts of interest ever more complex for Big 4 firms like KPMG, which have audit or non-audit relationships with almost every large and medium-sized business across the UK.
“With this situation only anticipated to intensify in the future, and with such developments likely limiting the growth of the firm’s restructuring business, the decision to commence a sale process was taken last autumn.”
Nimmo said: “This is tremendously exciting news for our business and our people and opens up enormous potential for growth.
“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.”
Mary O’Connor, interim chief executive of KPMG UK, said: “This is a significant transaction for KPMG.
“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.
“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.”
The sale will see 22 partners and 528 staff currently employed in KPMG’s UK Restructuring practice transfer to Interpath Advisory, making it the largest independent restructuring and turnaround business in the UK.
In addition, the Restructuring practice’s dedicated pensions covenant advisory practice, which provides advice to trustees and sponsoring employers of pension schemes, will transfer to the new company.
The sale does not affect KPMG’s Insolvency and Restructuring business in Ireland, which includes Northern Ireland.
Markus Noe-Nordberg, Managing Director and Head of the H.I.G. European Middle Market LBO team, said: “We are thrilled to welcome Interpath Advisory to the H.I.G. family.
“H.I.G. has had great success investing in leading professional services firms, and we will use this experience to help Interpath maximise its potential.
“This transaction is an ideal fit with our investment mandate and underscores once more H.I.G.’s ability to execute on complex transactions such as carve-outs.”
Nishant Nayyar, Managing Director at H.I.G. Europe, said: “We have been impressed by Interpath’s track record, deep client relationships and above all its collaborative culture.
“Interpath will be ideally positioned to support its clients in their recovery from the disruptions caused by the COVID-19 pandemic.
“We are proud to partner with Blair, Mark, Will and the entire team and look forward to supporting Interpath’s continued growth.”