PwC Consulting files for IPO
- By Gail Repsher Emery
- May 03, 2002
PwC Consulting filed May 2 for a $1 billion initial public offering of its stock. PwC Consulting is the management and consulting division of auditing and accounting firm PricewaterhouseCoopers LLP of New York.
PwC Consulting filed a registration statement with the Securities and Exchange Commission under the name PwCC Ltd. for an initial public offering of Class A common shares. The company is exploring a new branding strategy and plans to change its name in late June or early July, according to the registration statement.
The IPO is expected to take place by early August, according to a statement from PricewaterhouseCoopers. Morgan Stanley & Co. Inc. will act as sole bookrunning manager for the offering. PwCC will be headquartered in Hamilton, Bermuda, according to the registration statement.
PricewaterhouseCoopers ranked No. 46 on Washington Technology's list of Top 100 federal IT vendors for 2001, which will be published May 6. PricewaterhouseCoopers took in $128.3 million in federal prime contracting dollars in 2001, according to Washington Technology's analysis.
PwC Consulting employs more than 32,000 people in 52 countries. The company had income of $7.5 billion for the fiscal year ended June 30, 2001, including government and services revenue of $1.14 billion.
The company serves several industry sectors, including producers such as pharmaceutical and retail goods, government services, financial services, communications and entertainment and energy and utilities. Its work includes customer relationship management, supply chain and operations, information technology and business process outsourcing.
Thomas O'Neill was appointed chief executive officer of PwC Consulting in January. Previously, he was chief operating officer of PricewaterhouseCoopers. Before that, he was chief executive officer of PricewaterhouseCoopers in Canada. O'Neill joined PwC in 1967.
Several other firms with significant government technology business have gone public this year. They include ManTech International Inc. and Anteon International Corp., both of Fairfax, Va.
PwC Consulting's large contracts include a 10-year job worth up to $328.4 million to develop and test a single, unified system that will combine Medicare's accounting operations. The contract award was announced in September 2001. In December 2000, the Army awarded PwC Consulting a five-year, $453 million e-learning contract to provide distance education for about 80,000 soldiers via the Internet.
The primary purpose of the offering, according to the registration statement, "is to ensure that we will no longer be subject to the rules and regulations governing the independence of auditors from their clients and to eliminate any perceived conflicts of interest. Because the PricewaterhouseCoopers network of firms performs audit services for many of our current and prospective clients and industry vendors, we are currently restricted from performing services for some clients and implementing some of our growth strategies."
PwC Consulting cited the high-profile bankruptcy of Houston energy firm Enron Corp. in its registration statement.
"In the Enron situation, governmental authorities and the media are investigating whether the management consulting fees paid to Arthur Andersen compromised its role as Enron's independent auditor," the statement said. "The independence disclosure rules and the fallout from the perceived conflicts of interest in the Enron situation are significantly limiting our ability to compete."
The problem is greatest among its North American clients, PwC Consulting said. The firm estimated that its average monthly bookings from clients that also are audit clients of PricewaterhouseCoopers firms were about 57 percent lower in the fiscal quarter ended March 31, 2002, compared to the six months ended Dec. 31, 2001.