KPMG has confirmed that it has signed an unconditional agreement to sell its UK restructuring practice to Interpath Advisory, a newly-formed company backed by H.I.G. Europe and its current restructuring partners.
Around 538 staff and 22 partners currently employed in the restructuring arm will now 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 independent advice to trustees and sponsoring employers of pension schemes, will transfer to the new company.
KPMG will continue to provide all other advisory services however, including Debt Advisory, following the deal.
It said the decision to sell the business was driven by “significant changes” in the Insolvency and Restructuring market in the UK over recent years.
According to the firm, the increasing number and “complexity” of 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 the majority of large and medium-sized businesses across the UK.
With such developments limiting the growth of its restructuring business, KPMG said the decision to commence a sale process was made last autumn.
Mary O’Connor, interim CEO 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.”
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.
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.”