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By Laton McCartney
Deloitte this week announced that it has signed an asset purchase agreement to acquire substantially all of the assets of the North American Public Services practice of technology and management consultancy BearingPoint out of bankruptcy for $350 million in cash and the assumption of certain BearingPoint liabilities. BearingPoint is a global management and technology consulting company that filed for Chapter 11 bankruptcy protection on February 18, 2009. The agreement is subject to approval by the bankruptcy court, which may consider competing bids, and there can be no assurance that the purchase will be consummated.
In a press release, Deloitte stated: "The acquisition of BearingPoint's Public Services practice would be a compelling strategic transaction that would significantly accelerate the expansion of our federal government services business. We have seen strong organic growth in this business over the past five years, and the addition of BearingPoint's projects and practitioners would position us for even stronger performance as government agencies in Washington and around the country confront significant challenges."
BearingPoint stated in court filings that public sector clients of its technology and management consulting services include all 15 United States federal cabinet-level departments. In 2006 and 2007, it said, about 28 percent of its revenue came from the federal government, including government-sponsored enterprises, and about 11 percent of its revenue came from the Department of Defense alone. More than on quarter of the McLean, Va.-based firm's it revenue comes from the federal government.
BearingPoint has also signed a non-binding letter of intent to sell a substantial portion of our Commercial Services practice to PricewaterhouseCoopers (PwC,) for $25 million. Finally, it stated, we are in separate negotiations with other parties and local management teams involving the remaining parts of our business, including the potential sale of our practice in Japan to PwC. PwC Advisory Co., Ltd. (PwC Japan), a icewaterhouseCoopers firm operating in Japan, is also in advanced negotiations to acquire the company's consulting practice in Japan.
BearingPoint is in late-stage negotiations with its local management teams to sell its European and Latin America practices. Further, BearingPoint is in separate negotiations with other parties and local management to sell various Asia Pacific practices, separate from Japan.
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