Port Jackson Partners joins EY's strategy consultancy EY-Parthenon

07 May 2020 Consultancy.com.au

Australian strategic consulting firm Port Jackson Partners has combined with Big Four firm EY, with the joining forces designed to help the consultancy deliver strategic insights and a more end-to-end service offering.

The deal comes after Port Jackson Partners snubbed offers from two other major consulting firms, said Managing Partner Byron Pirola, who has been with Port Jackson Partners since 1991 after joining company founders Terrey Arcus and Fred Hilmer in their move from McKinsey & Company.

The move to join EY builds on a number of reasons, said Pirola in discussion with AFR. First, EY has over the years been growing its footprint in the strategy consulting segment under the EY-Parthenon brand, and today the division is a “distinct tier 1 strategy advisory house.”

After seeing Roland Berger back down from negotiation talks inches away from a deal in 2013, EY shifted its arrows to The Parthenon Group, a mid-sized North American strategy consulting firm. In the middle of 2014, EY succeeded in buying The Parthenon Group, and the firm was rebranded as EY-Parthenon.

EY Parthenon acquires Port Jackson Partners

Since then, EY-Parthenon has seen strong growth globally, on the back of organic growth and an aggressive merger & acquisition campaign, particularly in Europe. Between 2016 and 2018, EY-Parthenon bought the entire operations of OC&C Strategy Consultants (a UK-headquartered international strategy consulting firm) in the Benelux, France and Germany. Meanwhile, the firm also bolted-on a boutique consultancy in the Nordics founded by former consultants of Qvartz, which last month formally joined Bain & Company. 

Today, EY-Parthenon – which is dedicated to strategic consulting services and commercial due diligence work – has around 5,000 partners and staff working from offices around the world, including three in Australia; in Brisbane, Melbourne and Sydney. 

On the benefit of the joining forces, Pirola said to AFR, “It will help us provide additional value to our clients in the boardroom and at the C-Suite level by providing even greater strategic insights, along with the end-to-end services already offered by EY.” He added that it also will enable the consulting firm to better serve its increasingly more internationally client base. 

A cultural fit

Alongside the benefits to its offerings, Pirola highlighted the cultural fit with EY-Parthenon and EY as a key factor, with a misfit in vision and people the main reason why Port Jackson Partners turned down other interested parties.

“As anyone who knows us would expect, we thought about what EY was proposing, we analysed it and we debated it over many months,” Pirola said. But EY-Parthenon operates separately from the rest of EY and more like a traditional strategy consulting firm with small teams and a distinct culture, and this ultimately turned the decision in EY’s favour.

The integration sees the full team of Port Jackson Partners – 13 partners and 40 consultants and staff – join EY. The team will remain operationally separate for the foreseeable future but will work closely together with the existing EY-Parthenon team division comprising 5 partners* and some 30 consultants. Port Jackson Partners will rebrand as EY Port Jackson Partners, and Pirola will stay at the helm.

Despite the coronavirus, Pirola confirmed to AFR that the firm is “as busy as it ever has been” – the consultancy last year generated to the tune of $24 million in revenue and an after-tax profit of $5.2 million. However, EY itself is currently facing different fortunes. The nearly $2 billion Big Four firm is feeling the impact of the covid-19 induced downturn, and has had to slash the hours and pay of some staff by 20 per cent to offset declining fee income. 

Australia’s strategy consulting space

With a team of nearly 100 partners and consultants, EY-Parthenon has significantly beefed up its market share in Australia’s strategy consulting market, estimated to account roughly 15% of Australia’s $6 billion consulting industry. The leaders in the space remain the MBB: McKinsey & Company has around 500 staff nationally, Boston Consulting Group around 450, while Bain & Company has around 250.

Other large strategic consultancies with a presence in Australia include Oliver Wyman, Kearney, L.E.K. Consulting, Monitor Deloitte (Deloitte’s strategy arm built on the Monitor Group deal) and Strategy& (PwC’s strategy arm formed after it purchased Booz & Company). Accenture also has an arm dedicated to strategic services, Accenture Strategy, which two months ago bought boutique player AlphaBeta Advisors.

* Jeremy Barker, Matt Rennie, Scott Glover, Maurice Violani and Sin Yin Long.


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