Bonhams-owner Epiris joins bidding for KPMG restructuring arm

·2-min read

The private equity firm behind Bonhams, the auction house, has joined the bidding for the UK restructuring services division of KPMG, the big four auditor.

Sky News understands that Epiris, one of Britain's biggest mid-market buyout firms, is preparing to lodge a final bid for the business ahead of a deadline in the coming days.

Epiris, which also owns The Big Table, the owner of restaurant chains Café Rouge and Las Iguanas, is one of four parties in contention to buy the arm of KPMG which oversees corporate insolvencies and rescue refinancings.

Sources said on Thursday that the timetable for the sale process had not been impacted by the sudden departure last week of Bill Michael, KPMG's chairman, following remarks he made on an internal call.

HIG Europe and Intermediate Capital Group (ICG), two other financial investors, are also on the final shortlist of bidders.

The auction, which could fetch close to £400m, is expected to result in a preferred bidder being identified just as ministers unveil a long-awaited consultation on reforms to the audit profession.

Earlier this week, Deloitte became the first of the big four accountancy firms to announce the sale of its restructuring business, confirming a Sky News report that it was offloading the division to Teneo, a US-based public relations and corporate advisory firm.

The moves come amid a desire to eliminate potential conflicts of interest across the big four and a ban on them undertaking consulting work for audit clients.

All of the largest auditors have submitted plans to the Financial Reporting Council (FRC) demonstrating how they intend to "operationally separate" their audit and consulting arms during the next few years.

That push has come in the wake of accounting scandals at companies such as BHS, Carillion and Patisserie Holdings, which collapsed with the loss of tens of thousands of jobs.

KPMG was Carillion's auditor prior to its demise, and is likely to face a hefty regulatory fine in the coming months when the Financial Reporting Council concludes its investigation.

Under plans shared with prospective bidders, three of KPMG's top restructuring partners in the UK - Blair Nimmo, Will Wright and Mark Raddan - would hold senior management roles following a deal.

The firm's restructuring arm has handled a number of prominent insolvency processes during the COVID-19 crisis, including the administration of Intu Properties, the shopping centre-owner.

KPMG has also sold its pensions advisory business in a management buyout backed by Exponent Private Equity.

Epiris declined to comment.