As pressures mount for accounting firms to separate their audit and consulting services, PricewaterhouseCoopers (PwC) has appointed a new head of its consulting practice and is reportedly escalating plans for an initial public offering (IPO) of that practice.
Thomas O'Neill, PwC's chief operating officer, will replace Scott Hartz as head of PwC Consulting. Mr. Hartz is credited with building up revenues for the firm's consulting practice from less than $1 billion to more than $6 billion during his seven years in charge.
According to the Financial Times, Mr. Hartz admitted to a falling out with Samuel DiPiazza, PwC's recently installed chief executive, over strategy. âWe were going in different directions,â he said. In internal correspondence to PwC partners, Mr. DiPiazza wrote that "the delivery of legal independence for PwC Consulting through a transaction remains the clear and urgent priority."
The nature of the transaction remains uncertain. PwC has been trying to sell its consulting practice for some time, and the Financial Times reports that people close to the firm expect the transaction to take the form of an initial public offering (IPO).
Other sources say Mr. DiPiazza announced the planned IPO at a meeting of senior partners on Saturday, though the firm's main governing bodies have not yet endorsed the plan.
PwC spokesperson Sehra Eusunfzai, told AccountingWEB on January 30, 2002 that the firm has not ruled out other options. "All the restructuring options continue to be what they have always been," she said. "One option is a sale to a third party. Another option is the sale of a minority interest to outside parties. And the third option is the IPO option."
A press release dated January 31, 2002 officially announced PwC's IPO plans, saying the firm intends to file a
registration statement for the initial public offering in the Spring of 2002.