H.I.G. Capital is preparing to launch a formal sale process for Interpath Advisory, the restructuring and professional services firm it acquired from KPMG in 2021.

The private equity firm is targeting a valuation of approximately £800m, double the £400m it paid for the business four years ago.

According to sources familiar with the matter, banks have started pitching for roles to manage the transaction, which would mark a significant exit for H.I.G. in the professional services space.

Interpath initially posted losses of £10.6m in the year to March 2023, following a £10.2m loss the previous year, primarily due to set-up costs. However, the firm reported a turnaround with £3m in pre-tax profits last year after former KPMG partner Mark Raddan replaced Blair Nimmo as CEO.

Since its carve-out from KPMG, part of a broader trend among Big Four firms to reduce conflicts of interest, Interpath has expanded beyond restructuring, adding corporate finance advisory services and growing its headcount from 450 to over 1,000.

The sale would come amid persistent challenges in private equity exits, with macroeconomic volatility and high interest rates dampening deal activity. Amid this climate, firms are increasingly turning to alternative exit strategies, including asset break-ups and continuation vehicles.

The professional services sector continues to attract private equity interest. Recent deals include Cinven’s acquisition of a majority stake in Grant Thornton and Apax Partners’ £700m buyout of Smith & Williamson.

Both H.I.G. Capital and Interpath declined to comment on the potential sale.

Source: Financial Times 

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