Atol has pipped KMPG Consulting US to the post, acquiring KPMG’s Dutch and UK consultancy arms for $610 million. The downturn has left tech firms searching for new revenue streams, and Atol believes KPMG is the solution. Although the units are not cheap, the deal should allow Atol to broaden the range of services it offers clients and therefore boost profits.
Atol has acquired KMPG’s consulting units in the UK and the Netherlands.
Atol Origin has purchased the Dutch and UK consultancy units of audit firm KPMG. The news comes much to the dismay of KPMG Consulting US, spun off in 1999, which had been hankering after the two divisions itself in a bid to expand into Europe. Instead, the French information technology services provider will be making its debut in the world of business consultancy.
In the wake of the Enron debacle as well as Merrill’s recent blunder, KPMG and other financial services firms have been rethinking corporate strategies to minimize the concerns surrounding conflicts of interest. In some cases this has resulted in firms splitting accountancy divisions from research and consultancy units.
Atol has taken advantage of this new pressure to divest and jumped in with an offer ahead of rivals: it will pay a total of $610 million for both divisions. The French company will pay $399 million now and then settle the reminder in twelve months’ time with bond derived shares.
The acquisition for the IT provider officially marks its extension into consultancy. Following the technology downturn, providers have been exploring new ways to bolster revenues and corner a niche in the troubled market. Cap Gemini made a strategic decision to purchase Ernst and Young’s consulting arm, and Hewlett Packard made similar attempts to broaden its services range and pursued PwC for some time, albeit unsuccessfully.
Atol had already branched into IT consultancy and has continued to work with a strategy to upsell higher-value services to its clients. The new move consolidates its business plan and is likely to set the company ahead of rivals that are still on a quest for a new revenue spinner. It also stymies KPMG Consulting’s European expansion plans.
Related research: Datamonitor, 2002: United Kingdom – Management & Marketing Consultancy
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