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IBM Getting PwC Consulting for $3.5 Billion
MoThugz writes: "This Yahoo! News article reports that IBM will be buying PriceWaterhouseCoopers Consulting for a cool $3.5 billion in cash and stock. From the page: 'The purchase is aimed at boosting slowing revenues in the computer giant's large services business, which now accounts for more revenue than its well-known computers and mainframes. ... The merger gives IBM, the world's largest supplier of computers and computer services, the consulting arm of PriceWaterhouseCoopers, the world's largest accounting firm. The combined IBM-PriceWaterhouseCoopers will rank a close second to top consultant Accenture Ltd. , formerly Andersen Consulting.'"
http://www.monday.com used to be a site saying "PWC Consulting is now Monday" and explained the name. Now it points back to pwcconsulting.com and the IBM announcement.
Accenture is Andersen Consulting, which is a totally separate entity to Arthur Andersen, the no-longer-with-us accountancy firm. Just as (what was) Monday was nothing to do with PriceWaterhouseCoopers the accountants (I believe) and KPMG Consulting is NOT the same as KPMG LLP the accountants.
and this post gets modded down as redundant:
Accenture was originally part of the Arthur Andersen LLC conglomerate, as Andersen Consulting. Notice the consulting, not accounting. In January 2001 they renamed themselves to Accenture and began public trade.
That all doesn't mean that it's off the hook, however.
Accounting was one of the first places to really start using "big iron" in business. Computers are really good at bookkeepping. Becuase the auditors were very familiar with the mainframes and minicomuters as everyone else started realizing that they might be useful for other projects, the auditors became computer consultants as well as auditors. This worked quite well for the auditors, who owned the accounting firms. However the computer consultants, who broght in most of the money during the 1990s wanted their cut. Becuase of this there was quite a bit of internal pressure to split the divisions, from the consulting side of the business, but the auditors wanted to protect their arrangment. Anderson/Accenture was one of the first to split off. The name change resulted from arbitration following the nasty split up of the two companies.
The other 4 accounting firms also have consulting divisions, that are in various stages of separation from the parent auditing company. Ernst & Young is still together, PWC is obviously spliting now, KPMG apears to still be part of the audit firm, and Delotte & Touche is also still together, I believe. E&Y is the least likely to split up, becuase most of their services are of the tax and financial type. However, they are all more likely to split now that sentiment is pretty strong against auditors providing consulting services.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
PWC was going to change its name to Monday and have an IPO to raise money. Now that it's been bought out, they no longer need an IPO. Probably the fact that they needed money is why they were bought out so easily.
As far as your figures, for 2nd Quarter 2002, IBM Global Services (consulting) revenue was 8.7b out of 19.7b (44%) total. Hardware made up 6.7b/19.7b (34%) and software 3.3b/19.7b (16.5%), and the rest other units.
A subsection of IBM Global Service (BIS - Business Intellience Services) will be merged as a new unit with PWC. Apparently PWC has/had 45% of the Fortune500 companies as clients.
"Teachers leave us kids alone
A blast from the past - "HP is considering the acquisition of PricewaterhouseCoopers' global management and information technology practice for between $17 billion and $18 billion in cash and stock, the company confirmed in a statement early this morning."
My current summer job is at Accenture and I've had to listen to these damn presentations about Accenture's history, so I might repeat it to clear the confusion. :)
In the beginning... there was Arthur Andersen, they founded a computer and strategy consulting company called Andersen Consulting. It didn't take many years for Andersen Consulting to grow larger than Arthur Andersen itself. Now Andersen Consulting had to pay each year large amounts of money to their parent company, because they couldn't make enough money on their own.
Now the people at Andersen Consulting wanted to break from Arthur Andersen, because they thought the yearly payments they made to Arthur Andersen was slowing down their growth. Arthur Andersen however didn't want to let Andersen Consulting go, so a legal battle began. As a part of the settlement in this legal battle (sometimes during year 2000), Andersen Consulting agreed to change their name to Accenture.
So basically the people here hate Arthur Andersen and they've been laughing their asses of because of Arthur Andersen & Enron.
So PWC had to sell off their consulting unit to somebody, or spin it off as a standalone entity. IBM makes sense as a buyer, since they already do IT consulting and related services. IBM probably got a good price, since this was a forced sale.
No big thing; it actually makes sense as a deal.
"...you have to keep them under a tight reign."
rein. under tight rein. like reindeer. they're reined together, see? or like horses. that's where the saying comes from. if you give a horse free rein, it will just do as it pleases. to control it, you have to keep it under tight rein.
Right. I worked for one of these orgs too, and since the accountants had more votes in the partnership and held the managing partner positions, they called all the shots. The consultants just got to complain about it and threaten to go elsewhere. Remember Accenture's multi-year fight to get out from under the thumb of AA? It was only resolved through *big* payments from Accenture to AA, and then only after bitter arbitration.
From Accenture's IPO prospectus:
"Until August 7, 2000, we had contractual relationships with Andersen Worldwide and Arthur Andersen under certain agreements whereby we and our "member firms," which are now our subsidiaries, on the one hand, and Arthur Andersen and its member firms, on the other hand, were two stand-alone business units linked through various member firm agreements to Andersen Worldwide, a single coordinating entity. On December 17, 1997, the Accenture member firms requested binding arbitration of claims that Andersen Worldwide and the member firms of Arthur Andersen, among other things, had breached or failed to perform material obligations owed to the Accenture member firms under the member firm agreements.
"On August 7, 2000, the parties to the arbitration were notified that the tribunal appointed by the International Chamber of Commerce in its final award, dated July 28, 2000, had ruled that Andersen Worldwide had breached its material obligations under the member firm agreements and that the Accenture member firms were excused from any further obligations to Andersen Worldwide and Arthur Andersen as of August 7, 2000. Under the terms of the final award, Accenture, and each of the member firms comprising it, was required to cease using the Andersen name or any derivative thereof, no later than December 31, 2000. On January 1, 2001, we began to conduct business under the name Accenture.
"On December 19, 2000, Andersen Worldwide and Arthur Andersen LLP, on behalf of themselves and all other Arthur Andersen member firms, partners, shareholders and others, and Accenture Partners, S.C. and Accenture LLP, on behalf of themselves and all other Accenture member firms, partners, shareholders and others, executed a binding memorandum of understanding agreement to settle and resolve all existing and potential disputes among the parties concerning the implementation of the final award and the separation of the Accenture member firms from Andersen Worldwide and Arthur Andersen, including the discharge and release of all obligations of parties under the terminated member firm agreements between the Accenture member firms and Andersen Worldwide. The memorandum of understanding agreement provided for the parties to enter into a number of definitive agreements with respect to services, subleases, releases and indemnities and to finalize other arrangements among the parties. It also contained provisions for specified uses by Accenture of its former name. On March 1, 2001, Accenture, Andersen Worldwide and Arthur Andersen completed implementation of the memorandum of understanding agreement by executing releases and indemnities, finalizing other arrangements among the parties and entering into services agreements..."
Milo