It's been nearly six months since IBM finalized the acquisition of the technology consulting division of PricewaterhouseCoopers (PwC). Over the months, PwC has been wooing back former PwC clients that left the consulting firm before IBM's acquisition. The "winback" program has been a success, with IBM winning back 70 percent of the consulting clients that were lost.
The PwC acquisition added to IBM's client base, boosting the consulting division by 56 percent. As a result, IBM is now the largest consulting firm in the world. Its estimated annual revenue of $15 billion beats out Accenture, its nearest rival, which last year had revenues of $13.1 billion.
On July 31, 2002, AccountingWEB reported that the two firms had reached an agreement for IBM to buy PwC's consulting arm for $3.5 billion in cash and stock. Two years earlier, PwC had hoped to get as much as $18 billion for the division. But by the summer of 2003, the timing was right for IBM and PwC to make a deal. At the time, PwC was furiously shedding noncore businesses in order to comply with impending federal regulations limiting the consulting services the firm could provide to its audit clients.
The acquisition has proven to be a win-win situation for both IBM and former PwC clients. By adding PwC's expertise in high-end consulting and software installations to its roster, IBM increased the range of services it offers while former PwC clients gained access to IBM's research labs, outsourcing unit, and financing division.