PwC sells mobility tax and immigration business for $2.2 billion

PwC has agreed to a deal with Clayton Dubilier & Rice, which will see it offload its global mobility tax and immigration services practice. The Big Four firm will receive more than $2 billion from the takeover, in its biggest sell-off for almost two decades.

The last time PwC decided to sell off a major portion of its global empire, the world was a very different place. In 2002, the Enron scandal had placed the surviving Big Four firms under pressure to sell off their consulting businesses. While PwC, Deloitte, KPMG and EY have since moved back into the industry, at the time this saw PwC offload its advisory arm to IBM, for $3.5 billion in cash and stock.

Almost 20 years later, scrutiny is once again mounting on the Big Four over perceived conflicts of interest between their auditing and consulting functions. In this context, the Big Four has been taking steps to offset such criticism. In early 2021, this saw Deloitte agree to sell its UK insolvency business to public relations and advisory company Teneo, backed by CVC Capital Partners.

Meanwhile, a month later, KPMG sold its restructuring practice in a management buyout worth around £400 million, with private equity firm HIG Europe backing the newly independent Interpath Advisory.

Now, PwC has followed suit by deciding to move on its worldwide mobility tax and immigration services business. The deal represents PwC’s biggest sell-off since its deal with IBM almost two decades previously, as private equity firm Clayton Dubilier & Rice (CD&R) purchases the business for $2.2 billion.

Globally, PwC’s mobility tax and immigration services unit advises more than 3,000 organisations around compliance issues when they move staff overseas. The business operates in about 40 territories worldwide, with a main presence is in the US and UK, and substantial operations in Australia, Canada and the Middle East.

During the pandemic, demand for this kind of work ground to a halt, with Covid-19 measures meaning international travel essentially dried up overnight. Now though, as business travel returns to the fore, CD&R believes the business is positioned to make the most of demand from businesses looking to navigate “more complex” compliance issues that have arisen.

Upon completion of the transaction, the business will be rebranded and led by new CEO Peter Clarke – currently Global Managing Partner for global employee mobility at PwC. CD&R Partner Russ Fradin will take on the role of Chair – drawing on his experience from his time as former CEO and Chair of Aon Hewitt.

Fradlin noted, “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 for a globally integrated provider with a sophisticated digital platform.”

CD&R is one of the world’s oldest private equity players. Founded in 1978, it has managed the investment of more than $30 billion in approximately 90 businesses, representing a broad range of industries with an aggregate transaction value in excess of $140 billion. The organisation is on something of a spree at present, having only recently beaten Fortress Investment consortium at auction for Morrisons, in a £10 billion deal for the supermarket.