| | By Mick James
Last February’s news
that BearingPoint had
entered Chapter 11 in
the US was a shocking
moment for industry –
was a top consulting
brand going to disappear
forever?
Now six months later
a “new” BearingPoint has
emerged, and one with a
distinctly European
flavour. While the US
operation is being sold
off piecemeal, the
management team of the
firm’s EMEA units have
come together to
complete a $69m
management buyout.
“The initial
objective for the global
entity was to
restructure and remain
as a global business,”
explains Stefan Spohr,
former and now lead
partner for the UK and
Ireland. “When it became
clear that was not
viable, we started very
quickly to focus on the
MBO (management buyout).
The European businesses
were never part of that
filing, which meant we
were somewhat insulated
from those events.”
Although Spohr says
there was “no shortage
of interest” from
outsiders, the MBO has
not relied on any
outside equity, being
fully funded by the 120
plus former MDs who now
become partners in the
new firm.
“The key dynamic for
us was that that the
EMEA business has been a
very profitable entity
with very strong
relationships with
clients," he says.
It was also quickly
decided that the firm
was going to retain the
BearingPoint name, which
is very well recognised
in the firm’s largest
markets in Germany and
France. The UK unit is
smaller, because of the
firm’s quirky history –
formed mainly from
former KPMG consulting
practices with the
addition of parts of a | |
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| | fragmenting Andersen
Business Consulting.
BearingPoint never
acquired either of those
entities in the UK and
has had to rebuild from
an (admittedly strong)
base in Ireland.
But while the firm is
reverting in some ways
to a “traditional”
partnership structure,
that history has driven
some significant changes
to the way BearingPoint
will operate going
forward.
“We are coming out of
the MBO not as a
federation of
partnerships but as an
integrated European
practice,” says Spohr.
“The UK and Ireland
business is an integral
part of this operation,
and given that we are a
bit smaller than other
parts, it’s particularly
important that we are
operating and running
this as a European
business so that we can
leverage the capability
of the firm overall.”
With growth firmly on
the agenda, the firm was
keen that no obstacles
would stand in the path
of attracting talent,
whether at a senior
level or from its
ongoing graduate
recruitment programme.
“There was a fair
amount of debate about
how to set up this new
business as a
stand-alone entity, and
we realised that for
long-term success we had
to ensure that the
founding partners do not
have an insurmountable
advantage over
subsequent partners
whether they are hired
in or promoted,” says
Spohr. “We didn’t want
to create a situation
where the founding
partners have an
interest in making a
sale of the business in
the near future – the
only difference is that
the founding partners
are in it from day one
and will therefore
participate in the gains
for longer.”
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Even thought the
“new” BearingPoint is a
smaller entity than
before, Spohr believes
the firm has more than
enough “scale and heft”
to support its clients.
“We see ourselves as
a global network with
European roots but
global reach, and we
will develop
partnerships and
alliances with a select
number of consulting
firms in North America,
obviously, but also with
a significant focus in
Asia Pacific.”
In the UK market this
will involve
implementing changes
that the firm has been
working on for the last
two years, drawing on
its strengths in the
Irish market and looking
for “sweet spots” to
grow into.
“The UK market is a
very mature and
sophisticated market and
a difficult one to be
successful in, but our
ambition is to be a much
more significant
provider of consulting
capability for our
clients and we do see
the potential for growth
here,” says Spohr. “But
we do have to pick our
battles.”
More details of
BearingPoint’s plans
will emerge over the
next few months as the
dust of the MBO settles.
“For the last six
months we have been
fighting with one hand
tied behind our backs
but now we have a much
more positive story to
tell,” says Spohr.
“Objective number one is
to finish 2009 as
profitably as possible,
then to also position
ourselves well for the
coming year. We’re
emerging from the MBO
with a real
entrepreneurial spirit –
we’re taking our destiny
into our own hands.” | |
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