FTI Consulting Inc. (FCN) announced its plans to acquire the majority of LECG Corporation’s remaining European operations. Earlier this month, FTI Consulting announced the acquisition of International Arbitration and Airline Competition practices of LECG Corporation but refrained from disclosing the terms. The completion of the new deal with LECG Corporation is subject to definitive agreements as well as satisfaction of closing conditions.
LECG is a global economics, finance and business consulting firm with approximately 1,000 professionals in 37 locations. The company has offices in London, Brussels, Paris, Madrid and Milan. FTI Consulting has also inked a definitive agreement with certain key employees who will begin service immediately after the deal with LECG Corporation is closed.
The new deal is expected to include three LECG practice groups in Europe. The first is LECG’s market-leading competition policy practice, including Dr. Jorge Padilla, with offices in London, Madrid, Brussels and Paris. The second is LECG’s financial advisory services practice, including its forensic accounting, valuation and Europe-based international arbitration practices, and finally LECG’s tax consultancy group, focusing on tax consulting and related valuation and transfer pricing services, based in London.
FTI Consulting intends to strengthen its already sound advisory team in U.K. and Europe via this acquisition. The company expects to add a billion dollars in revenue over the next four years through growth and acquisitions, the most of which will be from Europe, Asia and Latin America. In the recently concluded fourth quarter, FTI Consulting’s European practice gained momentum. The company’s European score affirms its confidence in expanding further in that market.
Through this transatlantic acquisition, FTI Consulting looks forward to better serve clients, deepen and strengthen its economic and financial advisory services in London, and expand its leading corporate restructuring and transactional advisory services with a new offering in corporate tax consulting.
We view the deal as strategically positive, given LEGC Corporation’s dominant position in the European market. FTI Consulting has been active in inorganic expansion. It has made over 25 acquisitions over the past five years. Past European acquisitions of FTI Consulting include a U.K. company providing dispute, resolution and procurement services to construction, engineering, transportation, and oil and gas industries and Forensic Accounting LLC (FA), another U.K. based independent forensic accounting practice.
FTI Consulting competes mainly with CRA International Inc. (CRAI) and Navigant Consulting Inc. (NCI). CRA International also has a noteworthy coverage in U.K. FTI Consulting currently retains a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating. We are also maintaining our long-term “Neutral” recommendation on the stock.
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