KPMG Consulting Faces Unexpected Problems

When KPMG Consulting floated its initial public offering earlier this year, the next step on the firm's agenda was to consolidate its worldwide operations into one legal entity. The plan was to use the firm's equity to purchase its operations around the world, thus creating a single, global organization.

The European firms were to link up with one another within months of the float, then, when SEC approval was in place, the U.S. operation was to consolidate with the European group. However, there were problems with this scenario from the outset.

The French KPMG practice sold itself to CSC in 1998, and the Belgian practice was acquired by PricewaterhouseCoopers in 1999. More recently, the Italian KPMG Consulting group decided not to join the rest of its remaining European brethren in the consolidation effort.

It appears that the plan for consolidation is now uncertain. "This was all supposed to have happened months ago, but now the indications are than it will have to wait until the autumn when it is hoped the technology sector will start to pick up. There is no appetite for acquiring the European operations at the moment," said an unnamed senior source at KPMG Consulting.

Meanwhile, shares of KPMG Consulting listed on the Naasdaq index as KCIN have dropped from their float price of $18 to a low of $10 and are now hovering around $14 each. The market value of KPMG Consulting has dropped by more than half from $6-$7 billion at the time of the float to less than $3 billion.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Apr 17
In this exciting presentation Excel expert David H. Ringstrom, CPA shares tricks that you can use with pivot tables every day. Remember, either you work Excel, or it works you!
Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.