Allegro Funds and PwC have agreed on sale terms that will see the creation of a separate firm, to be known as Scyne Advisory.
Scyne Advisory will have about 1,750 employees and the challenge of rebuilding trust with the government sector.
Spinning off the public sector consulting arm that covers health and defence among other industries was deemed necessary by PwC following increasing calls on PwC to be banned from tendering for or receiving government contracts after revelations a former PwC partner breached a confidentiality agreement related to drafting of tax legislation almost a decade ago.
The dollar-dazzler deal has a transaction date of 1 July 2023, and Allegro and PwC expect to have the transaction finalised by the end of August.
A statement from Allegro details various aspects of the deal that include a commitment of more than $100 million to kicking off the new practice.
The funds, the Allegro statement says, will “support the employment and operational costs during the transition, making the necessary investment in people and systems”.
An independent board of directors will be appointed, and former Federal Court judge Andrew Greenwood has agreed to join the board as a non-executive director.
Greenwood has already accepted the chairmanship of a board committee on Probity, Conflicts and Ethics that will be responsible for vetting employees joining the new advisory practice.
The board of directors will also establish Audit & Risk and Remuneration subcommittees.
Allegro’s announcement says that the firm will initially be guided by the leadership of PwC’s Government, Health, Infrastructure and Defence and Trust and Risk groups until such a time as a search for a chief executive officer is completed, and a full batting line up of firm leadership and board appointments is finalised.
Partners in the new practice, Tim Jackson and Ben Neal, have jointly said the new practice is a revolution in government advisory in Australia.
Jackson and Neal are both transitioning from the PwC mothership into the new vehicle. Neal has been involved in PwC’s consulting practice since 2016, following a decade in the public sector, while Jackson joined PwC’s consulting practice in 2014 after spending more than three decades with consulting firm Booz & Company.
“We have a once-in-a-generation opportunity to lead the change required in government advisory in Australia. The DNA of our people is solving complex problems impacting the public sector. Governments throughout Australia are assisted on a daily basis by external advisers, which play a meaningful role in the ecosystem of policy development and service delivery,” Jackson and Neal said.
“Governance and culture will be at the core of the new business. We are pleased to have secured roles for around 1,750 people to continue making a contribution to governments across the country. Our people have deep sector knowledge and they will set our new culture, with the needs of our clients’ remaining paramount. Restoring those clients’ trust is our number one priority.”
Allegro Funds co-founder Adrian Loader said the private equity play is backing the new firm’s leadership to drive change in the government advisory sector.
“It’s clear there is a need for a strong and independent government advisory firm of scale in the Australian market. Scyne Advisory will have an industry-leading governance model able to meet the requirements of the Australian government and its agencies,” Loader said.
“We have been incredibly impressed by the quality of the people and their attitude and outlook. We’re pleased to have the Honourable Andrew Greenwood join our Board, bringing expertise and independence to ensure that we have best practice probity and conflict processes.”
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