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PwC to sell mobility unit to CD&R for $2.2bn

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PwC to sell mobility unit to CD&R for $2.2bn
The Big Four accounting firms, which include EY, KPMG and Deloitte, have been disposing of company divisions to private equity firms. Photo: Leon Neal/Getty

PwC has struck a deal to sell its mobility services division to US private equity firm Clayton, Dubilier & Rice (CD&R) for $2.2bn (£1.6bn).

The sale of the unit, which advises more than 3000 organisations on tax and immigration issues when they move staff abroad, is the firm’s largest sale in almost 20 years.

Peter Clarke, global managing partner for global employee mobility at PwC, will take the helm as chief executive of the newly-formed rebranded company, the Financial Times reported. Russ Fradin, former chief executive and chair of Aon Hewitt (AON) and a partner at the buyouts group, will be chairman.

The unit has suffered over the last year due to the coronavirus pandemic, and the enforcement of lockdown and travel restrictions, but its new owners will be looking to turn this around.

“The return of business travel, emerging mobile work patterns, and the heightened need for compliance in a complex business and regulatory environment will drive significant need,” Fradin said.

Read more: UK to open up more travel by scrapping hotel quarantine for dozens of countries

The division currently operates in around 40 territories across the world, with a strong presence in the UK and the US, and substantial operations in Australia, Canada, and the Middle East.

The sale is expected to be completed in the first half of next year, PwC confirmed, creating a “free-standing, global platform with more than 5,700 professionals hyper-focused on a seamless cross-border experience for clients, while accelerating investment in technology and new services”.

It comes as the Big Four accounting firms, which include EY, KPMG and Deloitte, have been disposing of company divisions to private equity firms. Last December PwC offloaded its fintech business eBam, and in 2018 sold its US government services division to Veritas Capital.

Meanwhile, Deloitte and KPMG both sold their UK insolvency units in February and March this year, respectively.

Read more: Morrisons shareholders set to approve £7bn CD&R takeover

CD&R, which counts former Tesco boss Terry Leahy as an advisor, has just bought supermarket chain Morrisons (MRW.L) for £7bn ($9.6bn) after a long takeover battle against Fortress Investment Group.

CD&R emerged victorious with its 287p per ordinary share bid in an auction this month.

Stephen Shapiro, a CD&R partner, said: “CD&R has a longstanding track record of executing global carve-out transactions helping companies transition from corporate ownership to independent models. 

"We believe, as a free-standing platform, PwC’s Global Mobility Tax and Immigration Services business will be positioned to increase its value proposition to its world-class client base.”

Watch: What are SPACs?

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