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Breaking: PwC to acquire Booz & Company

Posted by Khaled Kteily on in All About Consulting
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The facts: 

Announced just a few hours ago, PwC is planning to purchase Booz & Company, pending a vote by Booz's 300 partners in December. For those of you who read our post two months ago - "Will mid-sized consulting firms exist in 2015?" this does not come as a huge shock, although at the time talks were focused on PwC acquiring Roland Berger. 

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How big is the acquisition?

According to the Financial Times, "Neither group would disclose the value of the transaction, though it is understood to be worth several times Booz’s $1bn of annual revenues, according to people familiar with the agreement."

For reference, PwC's Advisory revenues are about $9B, and Booz's revenues have recently been pegged between $1B and $1.4B, meaning that this is a fairly substantial acquisition. 
 
What does this mean for the industry?
 
Large consulting firms are increasingly pressured to provide 'complete services', which includes major strategic work. Historically, this has been the strength of strategically-focused firms such as McKinsey, BCG, Bain, Oliver Wyman, Monitor Group, etc. and represents an immediate new threat. Such firms might have beaten out Booz and PwC independently, but it will be increasingly difficult to compete against a firm that can provide both top-tier strategy consulting and large-scale transformational capabilities. 
 
The better question is: Who's next?
 
Check out our original article for some more background on potential acquisitions, relative sizes of firms, and our projections for what will happen. 

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Guest Oct 25, 2014