KPMG bags Equaterra in latest consultancy consolidation

Business consultancy KPMG has acquired sourcing advisory Equaterra after months of negotiations.

Business consultancy KPMG has acquired sourcing advisory Equaterra after months of negotiations.

Computer Weekly blog Inside Outsourcing first revealed the negotiations in August last year.

The agreement comes weeks after the parent company of sourcing consultancy TPI, Information Services Group, acquired IT consultancy Compass.

Robert Morgan, who co-founded Morgan Chambers which was acquired by Equaterra in 2007 and makes up the bulk of Equaterra Europe, said the deal has been talked about for months.

He says there will be a battle between the big consultancies to become one-stop shops. "The global challenge now is between Deloitte, TPI and KPMG. Because TPI acquired Compass for benchmarking data it is the only truly holistic advisory"

"I expect Deloitte to respond with an EU acquisition in due course"

There have been persistent rumours about Deloitte acquiring TPI. One industry source says TPI's acquisition of Compass could be the perfect bait for Deloitte.

"The big consultancies want benchmarking data and Compass TPI now offers a fully fledged sourcing and benchmarking business. KPMG will not get this benchmarking data through Equaterra."

One source says "advisor wars" are gathering pace. "TPI struck a blow to Equaterra recently in securing the multi-billion pound Rolls Royce renewal contract from Equaterra, which had held the account for many years". He added: "KPMG's scale and senior management skills will ensure that deals such as the recent €6bn Eon deal in Germany don't automatically go to TPI"

Mark Lewis, partner and head of outsourcing at law firm Berwin Leighton Paisner, says this could mark the end of the corporate sourcing consultancy market.

"Now you have the big consultancies with sourcing capabilities competing with thousands of independent consultants or small companies."

"There are thousands of independent consultants working on big deals and they can compete with the big consultancies because they bring in the skills when they need them."

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