Herald staff and
ASSOCIATED PRESS
Accounting firm KPMG LLP has bought out Arthur Andersen LLP’s former Seattle office, the firm announced Thursday.
It’s one of a series of moves Andersen is making as it both fights for its life in an obstruction of justice trial and continues to remake itself behind the scenes.
The Seattle deal brings 206 former Andersen partners and employees into KPMG’s operation. KPMG now has 402 partners and employees. Terms were not disclosed.
All former Andersen personnel will go through training and orientation programs in KPMG’s practices, said Russell Crawford, the firm’s partner in charge of tax for the Pacific Northwest.
In other moves, on Wednesday, Andersen announced rival Deloitte &Touche would hire away about 2,000 Andersen workers, including nearly 200 partners, across the United States. Andersen did not disclose terms of the agreement.
Earlier Wednesday, KPMG Consulting Inc. — a unit spun off from KPMG LLP — announced it plans to acquire as many as 23 business consulting units of Andersen Worldwide’s member firms for up to $284 million.
And Ernst &Young LLP acquired Arthur Andersen’s Pittsburgh audit and tax practices in a deal involving 87 Andersen employees who will join Ernst &Young’s office in that city.
Andersen said the Deloitte and Ernst &Young deals "are consistent with the firm’s plan to move forward as a smaller and different firm." Andersen is splitting off its tax and consulting businesses for badly needed cash.
KPMG Consulting said it had signed a letter of intent that covers the consulting business of Andersen member firms in the United States, Europe, Asia and Latin America. Those businesses had combined revenue of about $1.4 billion last fiscal year.
The firm has already acquired Andersen’s consulting business in Hong Kong and China.
McLean, Va.-based KPMG said completion of the deal is subject to reaching agreements with each of the Andersen member firms. Each deal will require the approval of local partners and regulatory authorities.
Andersen Worldwide includes Arthur Andersen LLP, the Chicago-based company that audited Enron Corp.’s financial records. Andersen is on trial in Houston for an obstruction charge relating to the shredding of Enron-related documents last year.
KPMG Consulting hopes to have definitive agreements with the Andersen offices willing to join the firm within 30 to 45 days, with closings completed sometime this summer, according to company officials.
The final cost of the acquisition will depend on how many Andersen offices agree to join KPMG, Blazer said, adding that 90 percent of the partners of each office must agree to join the company for the acquisition of the office to go forward. Those partners that refuse to join KPMG must abide by the noncompete agreement they signed with Andersen.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.