PwC sells mobility tax and immigration enterprise for $2.2 billion
PwC has reached a deal with Clayton Dubilier & Rice that will result in the company outsourcing its global practice for mobility taxes and immigration services. The Big Four firm will receive more than $ 2 billion from the acquisition in its biggest sell-off in nearly two decades.
The last time PwC decided to sell much of its global empire, the world was a very different place. In 2002, the Enron scandal put the surviving Big Four firms under pressure to sell their consulting business. While PwC, Deloitte, KPMG and EY have since returned to the industry, PwC was relocating its advisory arm to IBM for $ 3.5 billion in cash and shares at that time.
Almost 20 years later, the Big Four is regaining control over perceived conflicts of interest between their auditing and advisory roles. In this context, the Big Four have taken steps to counter this criticism. In early 2021, Deloitte agreed to sell its UK bankruptcy business to PR and consulting firm Teneo, backed by CVC Capital Partners.
A month later, KPMG sold its restructuring practice in a management buyout valued at around £ 400 million, with private equity firm HIG Europe supporting the newly independent Interpath Advisory.
Now PwC has followed suit and has decided to continue its global business with mobility taxes and immigration services. The deal marks PwC’s biggest sell-off since the deal with IBM nearly two decades earlier, as private equity firm Clayton Dubilier & Rice (CD&R) bought the company for $ 2.2 billion.
PwC’s Mobility Tax and Immigration Services division advises more than 3,000 companies around the world on compliance issues when they relocate their employees abroad. The company operates in approximately 40 territories worldwide, with a primary presence in the US and UK and significant offices in Australia, Canada and the Middle East.
During the pandemic, demand for this type of work stalled, with Covid-19 measures meaning international travel essentially dried up overnight. Now that business travel is back to the fore, CD&R believes the company is able to make the most of demand from companies looking to tackle “more complex” compliance issues.
Upon completion of the transaction, the business will be renamed and headed by the new CEO Peter Clarke – currently Global Managing Partner for global employee mobility at PwC. CD&R partner Russ Fradin will take the chair – based on his experience from his time as the former CEO and Chairman of Aon Hewitt.
Fradlin noted, “The return of business travel, new mobile work patterns and the increased need for compliance in a complex business and regulatory environment will greatly increase the need for a globally integrated provider with a sophisticated digital platform.”
CD&R is one of the oldest private equity players in the world. Founded in 1978, the company has managed investments of more than $ 30 billion in approximately 90 companies across a wide range of industries with total transaction values exceeding $ 140 billion. The organization is currently on a rampage after recently beating the Fortress Investment Consortium at auction for Morrisons in a £ 10 billion deal for the supermarket.