More KPMG/CISCO Info:
Media Release
KPMG LLP affirms commitment to public offering of consulting practice
Firm expects IPO resolution from Standards Board by early 2000
New York, August 9 – KPMG LLP, the US accounting, tax and consulting firm, has reaffirmed its intention to pursue a public offering for a portion of its consulting business.
"The KPMG Board of Directors has unanimously reinforced the firm's commitment to a consulting IPO as soon as the Independence Standards Board (ISB) issues its rules on the transaction. We expect a resolution from the ISB by approximately the spring of 2000, at which time we plan to further maximise the value of our fast growing Internet integration business," said Stephen G. Butler, KPMG chairman and CEO.
"KPMG's prolonged negotiations with the Securities and Exchange Commission regarding an IPO have adjourned without a satisfactory outcome for the firm. Any further discussion, debate and input on an IPO has been shifted by the commission to the domain of the ISB for review, and, ultimately, rulemaking," Butler added.
As announced today, Cisco Systems is expected to make a US$1 billion equity investment in KPMG and help drive additional revenues through referral of business leads from Cisco's 6,000-person sales force. KPMG in turn will add 4,000 consultants to serve the systems integration needs of Cisco's clients.
"We expect the Cisco-KPMG relationship to grow the business significantly, creating a more valuable entity, and we believe the market will recognise that valuation at the time of an IPO," Butler said.
"This transaction with Cisco is designed to enhance KPMG's leading position in Internet consulting. In addition, the prospect of issuing options following an IPO will afford KPMG a true competitive advantage over our Big Five peers, by enabling us to attract and retain the best talent in the market today and in the future," Butler noted. He added that KPMG shortly will incorporate its consulting practice as "KPMG Consulting."
For more information, contact George Ledwith at + 1 (201) 505 3543 or John Fidler at + 1 (201) 505 8849, both at KPMG LLP.
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