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

PwC has agreed to sell its global mobility services business to the US private equity firm Clayton, Dubilier & Rice for about $2.2bn, in its biggest disposal for almost two decades.

The unit, which advises companies on tax and immigration issues when they move staff overseas, operates in a market hit hard by the coronavirus pandemic. The buyout group hopes the business is now well-placed to benefit from a rebound as travel restrictions ease.

Peter Clarke, global managing partner for global employee mobility at PwC, will be the newly spun-off company’s chief executive. Russ Fradin, former chief executive and chair of Aon Hewitt and a partner at the buyouts group, will be its chair.

“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 its services, Fradin said.

The sale is the largest by PwC since it disposed of its consulting division to IBM for $3.5bn in 2002 as audit firms reacted to calls for greater independence in the wake of the Enron scandal. It later rebuilt its consulting practice.

PwC does not disclose revenue or profit figures for the global mobility business, which sits in its tax and legal division. CD&R also declined to provide the figures.

PwC reported global revenues of $45.1bn for the year to June 2021 and employs 295,000 people.

The sale is the latest in a string of disposals by PwC and its Big Four consulting rivals — Deloitte, EY and KPMG — to private equity firms.

PwC offloaded its US government services division to Veritas Capital in 2018. It sold fintech business eBam, now called LikeZero, in December and used the proceeds to hand UK partners a record average payout of £868,000 for the year to June.

Deloitte and KPMG have both sold their UK insolvency businesses in private equity-backed deals this year to head off pressure over conflict of interest.

Some of the Big Four’s star partners have also calculated that they will be able to earn more elsewhere as they will not have to share their earnings with other less profitable parts of the firms, according to people in the industry.

PwC’s global mobility business, which operates in about 40 territories worldwide, will be rebranded after the transaction completes, CD&R said. The sale is expected to close in the first half of 2022, it added.

The business has its biggest presence in the US and the UK with sizeable operations in Australia, Canada and the Middle East.

Clarke said he was “excited for the opportunity to become a freestanding organisation”.

It comes after CD&R agreed to buy the UK grocer Wm Morrison in a £10bn deal, on which shareholders were due to vote on Tuesday.