PwC acquires GEM Consulting

PricewaterhouseCoopers has substantially expanded its business advisory practice in Perth by purchasing management consulting firm GEM Consulting for an undisclosed sum.

GEM's three partners - Robert Radley, Darren Smith and Brian Beresford - and 20 staff have joined PwC but will continue to trade under the GEM brand.

Mr Radley said the firm would have greater growth opportunities as part of PwC.

"Its achieved almost its full potential in terms of where we can get to on our own," Mr Radley said.

GEM's partners had considered an east coast expansion and also looked at organic growth by bringing in new partners but opted instead for the PwC deal after being approached.

PwC's Perth office managing partner John O'Connor said the firm decided almost 18 months ago that it needed to expand its presence in strategic consulting.

"Our aim was to be distinctive among the accounting firms by bringing in top-end strategic people," Mr O'Connor said.

An acquisition was seen as the most effective way of reaching that goal.

GEM was established in 1996 by several partners, incldung John Poynton and Mark Barnaba, who also established a sister company, corporate finance firm Poynton and Partners.

They sold the two firms in 2000 to South African IT consulting group OST for a reported $40 million.

Most of the founding partners left in 2003 and subsequently established investment bank Azure Capital in September 2004.

GEM's management team progressively bought back the GEM business from OST in recent years.

Mr Radley said that he had spent a lot of time with PwC over the past month and was pleasantly surprised by the opportunities.

"I've been astounded at how much synergy there is. Its exceeded my expectations."

He was confident that 'cultural fit' would not be an issue.

"That was something we needed to understand very carefully. I think the fit is remarkably good. We are very comfortable that we will work well with them."

Mr Radley and Mr O'Connor also commented that GEM's advisory business would not be constrained by PwC's large number of audit clients.

"I just don't see the work that GEM does as creating an independence issue," Mr O'Connor said.

He noted that several GEM clients were also PwC audit clients and they did not see a problem.

Mr O'Connor also said that PwC believed the GEM brand was valuable in the local market and would therefore continue to be used.

"Its well recognised in WA and we'd be foolish to drop the brand."

A PwC announcement is pasted below:

PricewaterhouseCoopers has today announced plans to strengthen its business advisory presence in Western Australia with the acquisition of Perth's leading management consulting firm, GEM Consulting.

Started in 1996, GEM Consulting has built a world-class team of specialists from consultancies, corporations and universities. With strong domestic and international experience, GEM Consulting has a solid reputation in the resources, mining, manufacturing and utilities sectors.

Newly appointed Perth Office Managing Partner, John O'Connor, likened PwC's acquisition of GEM Consulting as a meeting of great minds.

"This acquisition gives PwC and GEM Consulting the capacity to realise shared growth aspirations and to create a stronger, more distinctive footprint not just in Perth but nationally.

"Clients of both firms will benefit as we will be better positioned to provide a more comprehensive range of best practice advisory services and advice."

The acquisition of GEM Consulting and its three partners - Robert Radley, Darren Smith and Brian Beresford - will boost PwC's Perth advisory practice to 6 partners and approximately 80 staff.

GEM managing director Robert Radley said he believed GEM's domestic and international expertise, pragmatic mindset and personal hands-on approach would not only complement, but enhance PwC's depth of knowledge and skills across key industries.

The integration of GEM Consulting will take effect from 28 November, 2007.