Deloitte's $350 million public services acquisition of BearingPoint means 4,200 new Deloitte consultants
As was previously reported, Bearing-Point's agreement with senior debt holders has indeed set the table for a break-up and acquisitions of BP's practices.
BearingPoint's highly coveted North American Public Services Practice, as well as other areas including: healthcare, emerging markets, state and local government services, and education, were acquired by Deloitte on May 8. And the firm's Japanese practice was sold to Pricewaterhouse- Coopers on May 11.
An auction will be held in late May (after press time) for the North American Commercial Services business and associated Global Delivery Centers. PwC currently has the highest bid, at $25 million. That sale is expected to close by June 30.
Deloitte's $350 million cash acquisition is the most significant move thus far. More than 4,200 former BearingPoint consultants are now Deloitte consultants. And the feedback from clients and staff has been overwhelmingly positive.
After years of worrying about financial restatements, acquisition rumors, stock price free-falls and a bankruptcy filing, former BearingPoint executives are excited about the lack of distractions. "It is very refreshing to focus on clients instead of dealing with financial issues," according to Robin Lineberger, BearingPoint's former Global Public Services' executive vice president and now a Deloitte managing director.
In addition, reuniting with a multi-service legacy accounting firm has advantages. When BearingPoint separated from KPMG nine years ago, "we lost access to the firm's financial services practice and depth in forensic accounting. Deloitte's strengths in those areas represent a huge opportunity for synergy," Lineberger says.
As the only Big Four accounting firm not to divest a large portion of its consulting operations, "we watched how Deloitte managed through the restructuring of the profession and positioned itself ahead of other firms. From someone who has watched from the outside, I think this is a perfect purchase at an important inflection point in the market."
—Jess Scheer
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