In order to provide impetus to its corporate finance advisory
and restructuring activities,
FTI Consulting Inc.
) recently inked an acquisition agreement to acquire Brisbane,
Australia-based KordaMentha (Qld) (KMQ). The purchase consideration
of the deal was not disclosed.
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Founded in 1992, this Brisbane-based firm has been operating under
a licence agreement with the KordaMentha brand since 2003. Its
activities sprawl over various growth industries, including
construction, mining, healthcare and real estate. We view the
recent deal as strategically beneficial for both parties.
So far, the firm's performance has been worth-mentioning in the
turnaround and restructuring as well as, corporate advisory and
corporate recovery practices. It has contributed immensely to
several high-level Australian corporate recovery projects as well
as complex insolvency engagements in Australia.
Years-old association with blue chip clients also speaks of its
ability in the concerned areas of action. Given KMQ's dominant
position in the Australian market, the acquisition will provide FTI
Consulting a strong foothold in Australia, which is a key market
for the company's Asia-Pacific expansion.
This acquisition will considerably enhance FTI Consulting's reach
in Australia with additional 70 or so professionals in Brisbane and
the Gold Coast.
On the other hand, KMQ will be able to operate at a greater scale
after joining FTI Consulting. FTI Consulting provides advisory
services to primary business centers around the globe. Thus, KMQ
can now seize the opportunity to capitalize on FTI's geographic
diversity and better serve its clients.
The deal awaits completion of definitive documentation as well as
customary closing conditions and is expected to be sealed on 2nd
October, 2012. Following the completion, the two business units of
KMQ, KMQ Insolvency and 22 Capital, will be under the roof of FTI
Consulting's Corporate Finance/Restructuring practice.
Corporate Finance Restructuring (accounted for approximately 27% of
the total 2011 revenue) business of FTI Consulting ended the second
quarter on a strong note aided by more bankruptcies in North
America leading to increased demands for restructuring services as
well as higher demand across the Asia-Pacific region. We believe
such strategic acquisitions will augur well for FTI Consulting and
help it cater to the greater demand in Asia-Pacific.
The company has recently shifted its focus on Asia-Pacific region.
During the past two years, FTI Consulting has expanded its
footprints in Asia-Pacific region through all five of its core
business practices: Corporate Finance/Restructuring, Forensic and
Litigation Consulting, Economic Consulting, Technology and
Strategic Communications. In Asia-Pacific, FTI consulting is
located in Australia, China, Hong Kong, India, Indonesia, Japan,
the Philippines and Singapore.
FTI Consulting has been active in inorganic expansion. It has made
over 25 acquisitions over the past six years. It competes mainly
CRA International Inc.
Navigant Consulting Inc.
). FTI Consulting currently carries a Zacks #3 Rank, which
translates into a short-term Hold rating. We are also maintaining
our long-term Neutral recommendation on the stock.