PwC explores sale of stake in Indigenous consulting business

20 March 2024 Consultancy.com.au 3 min. read
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PwC has reportedly floated its minority stake in PwC’s Indigenous Consulting out to potential buyers, with the firm’s public sector freeze causing problems for the First Nations practice.

Professional services firm PwC has put its minority stake in self-branded indigenous consulting business – PwC’s Indigenous Consulting – on the sales block, according to a report in the AFR.

Established in 2013 and led by co-owners and managing directors Gavin Brown and Selwyn Button, respectively of Wiradjuri and Gunggari ancestry, PwC holds a 49 percent share in PIC, which has faced recent scrutiny for receiving ongoing government contracts.

PwC explores sale of stake in Indigenous consulting business

According to the AFR’s unnamed sources, PwC Australia has recently sent out expression-of-interest documents to private equity players, Indigenous business groups, and even its consulting rivals seeking potential buyers for the firm’s minority stake in the Supply Nation-certified business, with the divestment move said to be by mutual agreement. While the price-tag hasn’t been revealed, it’s expected the large slice of PIC should attract a great deal of interest.

Based out of Sydney with retiring consulting boss David McKeering and recently appointed chief transformation officer Thomas Bowden among its five-person board, PwC’s Indigenous Consulting serves public and private sector clients on matters which impact First Nations communities, with a focus on economic development, digital innovation, and systems change. The firm says that more than half of its consultants are of an Indigenous background.

“We offer a full suite of consulting services, regularly collaborating with PwC and its extensive array of specialist services,” the company states. “Combining our understanding of cultural, commercial, and community realities with the significant capabilities of the PwC network, PIC specialises in providing advice, developing strategies and supporting their execution to help realise the potential of Indigenous policies, programs, projects, organisations and businesses.”

However, the consultancy has come under pressure in the wake of the PwC government tax breach, in having been awarded fresh public sector contracts after the scandal broke.

Investigative news site The Klaxon, which focuses on corporate and government impropriety, calculated that PIC had received almost $45 million in federal contracts since 2015, including a ~$750,000 strategic advisory contract awarded by the National Indigenous Australians Agency last May.

The issue, according to critics, is in PwC’s large ownership share, with PIC having reportedly received upwards of $10 million in government contracts on a limited tender basis as part of procurement exemption for majority Indigenous-owned small-to-medium enterprises.

According to the AFR report, up to three quarters of PIC’s business stems from the government, with PwC’s significant loss of public sector expertise to Scyne Advisory also likely causing a drag.

While Scyne Advisory was floated as a potential suitor, it has a strict public sector mandate, with owner Allegro bound by non-compete clauses in other areas. Elsewhere, KPMG has a well-established Indigenous consulting joint venture in Arrila, but it’s difficult to imagine PwC selling a lucrative business to one of its major competitors.

Canberra-based Synergy Group meanwhile recently launched its first RAP, and is aiming to become the country’s leading consultancy within ten years.