What's Happening?
HIG Europe is set to launch the sale of Interpath Advisory, a restructuring consultancy, with a valuation of £900 million. The formal auction process will begin with details sent to prospective buyers. Moelis, an investment bank, has been appointed to manage
the sale process. Interpath Advisory has gained prominence through major restructuring mandates, including advising Sir Jim Ratcliffe on cost reductions at Manchester United. The consultancy was formed in 2021 following KPMG UK's separation of its restructuring division due to regulatory changes in the auditing sector. Under HIG's ownership, Interpath has seen significant financial growth, with earnings doubling and expected revenue growth of 20% this year.
Why It's Important?
The sale of Interpath Advisory highlights the ongoing interest in professional services firms specializing in corporate restructuring. The consultancy's growth and high-profile assignments, such as its role in the insolvency proceedings of Claire's, underscore its market significance. The divestment reflects broader trends in the auditing sector, where firms are restructuring to address compliance demands and potential conflicts between auditing and advisory roles. The sale could attract major private equity firms, indicating strong market appetite for established restructuring consultancies.
What's Next?
The auction process is expected to draw interest from several private equity firms, including Blackstone, Bridgepoint, Onex, PAI Partners, and Permira. The competition among these firms could drive up the valuation of Interpath Advisory. As the sale progresses, the consultancy's future ownership could impact its strategic direction and ability to secure high-profile assignments. The outcome of the auction will be closely watched by industry insiders and could influence similar transactions in the professional services sector.
Beyond the Headlines
The restructuring of auditing firms like KPMG, leading to the creation of entities like Interpath Advisory, reflects a shift in the industry towards greater compliance and independence. This trend may lead to more divestments and restructuring within major accountancy firms, potentially altering the landscape of corporate advisory services. The sale of Interpath Advisory could set a precedent for similar transactions, influencing how professional services firms navigate regulatory challenges and market opportunities.
