What happens when a leading Management Consulting Firm is acquired by a leading Accounting giant? The answer: Booz & Co. takes on a new name—Strategy&. What does this new name and image mean in the consulting world?
Booz & Co. is Now Strategy&
WSJ—Accounting giant PricewaterhouseCoopers completed its acquisition of management-consulting firm Booz & Co. on Thursday and has renamed Booz “Strategy&.”
The deal, announced last fall, is among the most prominent acquisitions by an accounting firm in years, and it furthers PwC’s recent push into the consulting field. PwC’s consulting business brings in nearly a third of its revenue and is growing faster than its core auditing business.
“We think it’s a really big step forward for PwC,” said Dennis Nally, PwC’s global chairman.
Partners at Booz approved the deal in December, and “a significant majority” of the partners have formally joined PwC, Mr. Nally said. The deal also has all necessary regulatory approvals. Financial terms of the deal haven’t been disclosed.
Strategy& Provides Consulting and Actionable Advice
Mr. Nally and Booz Chief Executive Cesare Mainardi, who is staying on as CEO of the acquired firm, said the name “Strategy&” came from what they see Booz as adding to PwC—an ability to not only counsel companies on corporate strategy but to help them translate that advice into concrete steps they can take.
“There’s a real desire for companies to not only have outside strategic advice but also help them deal with execution,” Mr. Nally said.
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A new name for Booz was needed because of the terms of its 2008 split from the firm now called Booz Allen Hamilton, said Mr. Mainardi. Under that deal, Booz & Co. couldn’t continue to use the Booz name if there was a change in control of the firm.
Booz will add to PwC’s $9.2 billion in global consulting revenue in fiscal 2013, which was 28.5% of its $32.1 billion in total global revenue. That is up from 21.7% in fiscal 2009. PwC’s consulting revenue rose 7.6% at constant exchange rates in 2013 over the previous year, compared with 1.4% for audit revenues.
Strategy& follows Monday in odd PwC Company Names
Strategy& isn’t the first odd corporate name associated with PricewaterhouseCoopers. When the company’s consulting arm was planning to split off from its accounting operations more than a decade ago, it announced that it was changing its name from the staid PwC Consulting to the more cryptic “Monday,” drawing an outpouring of commentary. The point became moot later that year, when International Business Machines Corp. agreed to buy PwC Consulting and absorbed the consulting operation into its business services operations.
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Since the sale to IBM, PwC has rebuilt its consulting operations, and other accounting firms that once divested themselves of their consulting arms have done the same. While the Sarbanes-Oxley Act bars accounting firms from providing many types of consulting services to companies they audit in the U.S., because of concerns over conflicts of interest, PwC and the other firms have focused on consulting for companies they don’t audit, as well as for companies outside the U.S. where Sarbanes-Oxley doesn’t apply.
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When PwC and Booz agreed to the deal, some were concerned that the combined firm would have to give up some client work from companies that currently use both PwC for auditing and Booz for consulting, to prevent conflicts under Sarbanes-Oxley.
But so far, only one company, Hillshire Brands Co., has said it is dropping PwC as its auditor because it also is a Booz consulting client, though it is still possible other client losses could occur.
Mr. Nally said the client losses at PwC have been “de minimis” thus far. He also said “very few” partners have left Booz because of the merger.
New Name, New Image
Does this mark the future of brand identity for consulting firms? This isn’t the first big change in name in financial giants in the past couple years. Look at the recent ING USA change in name to VOYA or Scotiabank changing the name of ING Direct to Tangerine. This rebrand, however, has many analysts and branding executives scratching their heads, questioning whether or not the name was a typo.
Related: How did ING Direct Prepare for Social Media Responses to Name Change?
We look forward to the updates in this naming saga.
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