Over 1200 PwC staff join spin-off Scyne Advisory

More than 1200 of the 1550 staff at PwC Australia’s government consulting business have agreed to move to the firm’s spin-out, set to be rebadged as Scyne Advisory.

More than 1200 of the 1550 staff at PwC Australia’s government consulting business have agreed to move to the firm’s spin-out, set to be rebadged as Scyne Advisory.

A spokesman for Scyne confirmed more than 1200 staff from PwC had confirmed they would join the new consulting business, spun out of PwC in July in a $1 deal with private equity operator Allegro Funds.

However, the number of acceptances is expected to increase as more contracts are returned by PwC staff who are on leave or in remote locations.

“We’re very pleased the vast majority of employees have committed to Scyne,” a spokesman said.

Allegro signed the deal with PwC to pick up its government consulting business after the heavyweight professional services firm wrecked its reputation by using confidential government briefings to construct tax strategies for its clients.

By securing more than 1200 staff from PwC Australia, Scyne Advisory moves closer to securing a final exit for the government consulting business. It has been hammering out its senior leadership team in recent weeks.

The business had been targeting as many as 1750 staff from PwC’s government consulting business when the deal was first announced.

This was alongside as many as 130 PwC government consulting partners who were offered equity in the new company, which was set to be organised in a corporate structure rather than a partnership model.

Only 117 PwC government consulting partners took the leap to the new firm last week, when letters were sent to formalise the division and transition to Scyne Advisory.

Partners joining Scyne will lose access to PwC’s generous retirement payment scheme.

Allegro Funds will now need to secure a formal deal with PwC in a considerably more complex ­transaction than the term sheet signed between the two sides in July.

The two sides now plan to execute the deal in September, in a delay from the original August deadline.

Scyne Advisory managing partner Richard Gwilym.

Allegro has said it will invest $100m in the spin-off operation in a bid to support the enterprise that previously brought in almost $600m in revenue each year.

Allegro will own about 75 per cent of the new firm, with the remainder to be held by PwC partners moving across.

However, questions linger over regulatory approvals as well as the composition of PwC staff making the leap.

Allegro will require approval of the Foreign Investment Review Board and will need to maintain access to government contracts.

The question of equity is understood to have been a sticking point for several director-level PwC staff offered roles at Scyne.

These staff, who will not be granted equity in the new business, are understood to have been unhappy about the move, with some electing to leave PwC for rival firms.

PwC and Scyne are still hashing out details of the separation of the government consulting business, which may see property and assets change hands.

In addition, Scyne will need to negotiate access to PwC systems or secure separate technology platforms for the new government consulting operation to run.

Scyne Advisory managing partner Richard Gwilym, who will run the new consulting house, said the company would target government work.

However, he confirmed to The Australian that Scyne Advisory would directly compete with PwC over contracts for not-for-profit organisations.

This is in addition to competing with its other big four rivals Deloitte, KPMG, and EY.

All existing government contracts with PwC will enter a 12-month run-off period in a bid to ensure continuity as the separation from Scyne Advisory takes place.

Originally published as Over 1200 PwC staff join spin-off Scyne Advisory