In a competitive business environment, strategic moves such as buying out a divested company and rebranding it can offer significant opportunities for growth and market repositioning. This blog explores the process and benefits of acquiring a company division that a parent firm wishes to divest and the subsequent rebranding efforts, with a particular focus on Deloitte’s acquisition of PwC Indigenous Consulting.
Understanding Company Divestments
A company divestment occurs when a firm decides to sell off a division or subsidiary. This decision may be driven by various factors, including strategic realignment, financial distress, or the desire to exit a non-core industry. For the divesting company, this move allows for a sharper focus on core operations or to address financial challenges.
For potential buyers, a divested company in need of new management represents an opportunity to acquire valuable assets or business units at potentially advantageous terms. This process involves negotiating a deal to purchase the stakes in the divested division, often requiring thorough due diligence to assess the value and potential of the acquisition.
The Benefits of Acquisition and Rebranding
Acquiring and rebranding a divested division can offer several benefits:
Market Expansion
By acquiring a division with established expertise or market presence, a company can quickly expand its service offerings or enter new markets. Deloitte’s acquisition of PIC allowed it to strengthen its position in Indigenous consulting, an area of growing importance and demand.
Leveraging Expertise
The acquired division often brings valuable expertise, client relationships, and intellectual property. Integrating these assets can enhance the acquiring company’s capabilities and competitiveness.
Enhancing Brand Value
A successful rebranding effort can revitalise the acquired division’s market presence and create new opportunities for growth. It allows the acquiring company to showcase its commitment to innovation and responsiveness to market needs.
Strategic Alignment
Rebranding provides an opportunity to align the acquired division with the acquiring company’s strategic objectives, ensuring that the new entity supports overall business goals and enhances operational synergies.
Key Considerations for Acquisition and Rebranding
There are some vital elements needed for a company to successfully push through with buying and rebranding a divested business:
Due Diligence
Conducting thorough due diligence will help understand the value and potential risks associated with the acquisition. This includes financial assessments, legal considerations, and an evaluation of the division’s market position.
Cultural Integration
Managing cultural differences between the acquiring and acquired companies is crucial for a smooth transition. Ensuring that employees from both sides feel included and valued can help in achieving a successful integration.
Client Communication
Keeping clients informed about the changes and how they will be impacted is essential for maintaining trust and ensuring continuity of service.
Monitoring and Evaluation
After the rebranding, it’s important to monitor the performance of the new entity and evaluate the effectiveness of the rebranding efforts. This involves assessing client feedback, market response, and overall business performance.
Deloitte and PwC Indigenous Consulting
One notable example of a divestment and rebranding is Deloitte’s acquisition of PwC Indigenous Consulting (PIC). PIC, a leading consulting firm specialising in Indigenous affairs and reconciliation, was a division of PwC that the parent firm decided to divest. Deloitte’s purchase of PIC is a prime illustration of how buying a divested company can lead to a successful rebranding and strategic realignment.
Background
PwC had spent the past year trying to leave the public consultancy space in light of the ongoing tax leaks scandal. It already sold its government consulting arm to Allegro Funds for $1, which would eventually be reactivated as Scyne Advisory.
In March 2024, reports surfaced that PwC was also ready to exit the First Nations consulting field, seeking to focus its resources on other areas.
Deloitte Australia seized the opportunity, announcing on 15 July 2024 that it had bought a 49 per cent minority share in PIC for an undisclosed sum. The acquisition allowed Deloitte, one of PwC’s rivals in the Big Four professional service firms, to expand its consulting services and strengthen its position in the Indigenous affairs sector.
As part of the deal, PIC went forward as Yamagigu Consulting, officially launching on 5 August 2024, with co-founder Gavin Brown staying on as CEO.
Rebranding Post-Acquisition
Following the acquisition, Deloitte undertook a comprehensive rebranding effort to integrate Yamagigu into its existing operations. Rebranding in this context involves more than just a name change; it encompasses aligning the acquired division with Deloitte’s corporate identity, culture, and strategic objectives.
Key steps in the rebranding process included the following.
Cultural Alignment
Integrating the former PIC’s unique culture with Deloitte’s corporate culture required careful consideration. The name “yamagigu” is a Wiradjuri word translated as “our purpose is to go with you.” Such a change is aimed at ensuring that employees from both organisations felt valued and included in the business’ new journey. The tribal attribution is also a strong factor – the Wiradjuri are one of Australia’s largest Aboriginal tribes, with significant presence in central NSW.
Assessing Brand Value
Understanding the strengths and market position of PIC was crucial in the transition. Deloitte needed to evaluate how the existing brand was perceived by clients and stakeholders to ensure a smooth transition. There is also much riding on the change, as PIC has built up ten years of success in handling Indigenous clients.
Speaking to Capital Brief Australia’s Jennifer Duke, Deloitte Australia CEO Adam Powick said that the PwC tax scandal shook that company into shedding some of its assets. The key driver for the PIC purchase was last year’s Voice referendum, which Deloitte and PwC supported along with the other Big Four companies. Powick said the fallout of the failed referendum is a sign that addressing First Nations communities will not be a divisive problem if there was a better push to help them achieve more economic prosperity.
Strategic Integration
Deloitte is integrating PIC’s operations, team, and client relationships into its broader business structure. This involved aligning processes, systems, and goals to create a cohesive offering. PIC’s strong composition of employees from the First Nations community can be a positive sign. Mr Brown himself is a true-blooded Wiradjuri and two of his four Partners are of mixed heritage: Roanna Edwards (Whadjuk/Ballardong Noongar) and Joe Hedger (Bundjalung/Yorta Yorta).
Communicating the Change
Effective communication was essential to manage stakeholder expectations. Deloitte needed to inform clients, employees, and partners about the acquisition and the changes to the brand, ensuring clarity and maintaining confidence in the new entity.
Conclusion
Buying out a divestment and rebranding that company can be a powerful strategy for business growth and market repositioning. Deloitte’s acquisition of PwC Indigenous Consulting exemplifies how this approach can enhance a company’s capabilities and market presence. The fact that the rebranded company is seasoned in handling Indigenous clientele also goes considerable distance to accepting them as part of the Australian family.
DISCLAIMER: This article is for informational purposes only and does not supersede business advice. AVANTE PARTNERS has no business interests with any company mentioned above.
ACKNOWLEDGEMENT OF COUNTRY: In the spirit of reconciliation, AVANTE PARTNERS acknowledges the Traditional Custodians of Country throughout Australia and their connections to land, sea and community. We pay our respect to their Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today.
