PracticeConsultingKPMG Consulting cuts IPO market value

KPMG Consulting cuts IPO market value

KPMG Consulting's decision to cut the number of common shares in an initial public offering to 112 million (and raise the price to $16 - $18 per share) could cut more than $1bn (£678m) off its market value when it goes public.

Under the initial IPO, KPMG Consulting offered 354.6 million shares at $6.75 – $8.75 per share which could have given it a market capitalisation as high as $3.102bn.

However under the new share scheme KPMG Consulting would only have a maximum value of $2.016bn if shares are bought at a premium.

KPMG Consulting is offering about 29 million shares, while its parent, KPMG LLP, is offering more than 83 million shares.

It is not yet known when KPMG Consulting will go public, but it has already received approval for a Nasdaq listing under the symbol ‘KCIN’.

The company revealed the IPO changes in a filing to the US Securities and Exchange Commission. It also disclosed that when it goes public, it would not remain a part of Big Five firm KPMG international.

KPMG’s decision to spin off its consulting wing followed announcements by the SEC signalling it intended to limit the consulting services offered by large accounting firms.

KPMG Consulting provides business and IT strategy, systems integration and other services to its clients.

Links

SEC Analysis – SEC wins audit war.

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