Combination Will Create Clear Leader in Turnaround and Restructuring;
FTI Exploring Sale of Applied Sciences Division
ANNAPOLIS, Md., July 24 /PRNewswire-FirstCall/ --
FTI Consulting, Inc. (NYSE: FCN), the premier national provider of turnaround,
bankruptcy and litigation-related consulting services, today announced that it
has reached an agreement to acquire PricewaterhouseCoopers' ("PwC") U.S.
Business Recovery Services Division ("BRS").
BRS is the leading provider of bankruptcy, turnaround and business
restructuring services to corporations in the United States. Headquartered in
New York, BRS has more than 350 people housed in 15 offices across the U.S.
with significant practices in New York, Dallas, Los Angeles, Chicago and
Atlanta. For the 12 months ended June 30, 2002, BRS had preliminary unaudited
annual revenues exceeding $150.0 million and pro forma EBITDA on a separate
company basis in excess of $45.0 million, net of estimated costs to integrate
BRS into FTI's Financial Consulting Division.
The acquisition of BRS is subject to Hart-Scott-Rodino review and is
expected to close late in the third quarter of 2002. The purchase price will
include approximately $140.0 million of cash plus 3.0 million shares of FTI
common stock. The cash portion of the purchase price will be financed by FTI
from its existing cash and a new senior bank credit facility, which will
consist of a term loan of approximately $75.0 million and a revolving credit
line.
FTI said that in connection with the acquisition of BRS, it is exploring
the sale of its Applied Sciences Division. Proceeds from any sale would be
used to reduce the debt incurred in connection with the acquisition of BRS.
The net effect of the acquisition of BRS and the possible sale of the
Applied Sciences division is expected to be immediately and significantly
accretive to FTI's earnings per share in 2002 and 2003 on the assumption that
the acquisition will be completed late in the third quarter of 2002 and the
planned disposition of Applied Sciences will be completed during the fourth
quarter of 2002.
FTI said that BRS, headed by Dominic DiNapoli, will become part of its
Financial Consulting Division, which includes FTI Policano & Manzo. FTI said
that the addition of BRS will create the clear U.S. leader in the turnaround
and restructuring arena and dramatically enhance its ability to service
corporate clients.
Jack Dunn, FTI's chairman and chief executive officer, stated, "We could
not be more excited about the prospect of having Dom DiNapoli and his team at
BRS join Bob Manzo, Mike Policano and our team at FTI. This acquisition
underscores our commitment to building a first class consulting company. BRS
is the recognized leader in corporate turnaround and recovery and has a
reputation for high quality services. We recognized that the move by PwC to
unbundle its audit and consulting services presented a tremendous opportunity
for us to take our company to the next level and significantly accelerate our
growth plan."
Bob Manzo, senior managing director of FTI Consulting, stated, "We are
excited to have Dom DiNapoli and his team join forces with us at a time of
unprecedented demand in the marketplace for our services. With our strength
in advising creditors of troubled companies, and BRS's strength in advising
the debtor side, this is an excellent fit."
Dominic DiNapoli, managing partner of BRS, will become a senior managing
director of FTI Consulting. Mr. DiNapoli said, "We took a very deliberate
approach to identifying and selecting the right partner for our practice as we
planned our separation from PwC. The separation frees us from the auditor
independence rules that restricted our growth potential. FTI offers us the
ideal platform to accelerate the growth and diversification of our business
and provides our employees the right environment to pursue their professional
growth."
FTI said that in connection with the BRS acquisition, it is exploring the
sale of its Applied Sciences Division and is in negotiations regarding such
sale with a group led by the division's president. The sale of the Applied
Sciences division will be subject to final negotiation, the completion of a
definitive agreement, as well as financing of the transaction by the acquiring
group. FTI has set as a minimum purchase price the approximate book value of
the division.
Stewart Kahn, president and chief operating officer of FTI, commented,
"The acquisition of BRS essentially completes our transformation to a
turnaround, bankruptcy and litigation-related consulting business and provides
the appropriate timing to pursue the sale of the Applied Sciences division.
While Applied Sciences is a significant part of our history and success, it
may have even better prospects on a stand-alone basis, given that it has a
large number of corporate clients and that we recognize that the BRS
acquisition will significantly increase our number of debtor-side engagements
and thus the number of potential client conflicts with Applied Sciences. Our
disposal of the Applied Sciences practice would eliminate those conflicts."
Second-Quarter Conference Call
FTI will hold a conference call to discuss the pending BRS acquisition,
second-quarter results and management's outlook for the rest of 2002 at
11:00 a.m. EDT on Thursday, July 25, 2002. The call can be accessed live and
will be available for replay over the Internet via http://www.vcall.com .
About FTI Consulting
FTI Consulting is a multi-disciplined consulting firm with leading
practices in the areas of bankruptcy and financial restructuring, litigation
consulting and engineering/scientific investigation. Modern corporations, as
well as those who advise and invest in them, face growing challenges on every
front. From a proliferation of "bet-the-company" litigation to increasingly
complicated relationships with lenders and investors in an ever-changing
global economy, U.S. companies are turning more and more to outside experts
and consultants to meet these complex issues. FTI is dedicated to helping
corporations, their advisors, lawyers, lenders and investors meet these
challenges by providing a broad array of the highest quality professional
practices from a single source.
This press release includes "forward-looking" statements that involve
uncertainties and risks. There can be no assurance that actual results will
not differ from the company's expectations. The company has experienced
fluctuating revenues, operating income and cash flow in some prior periods and
expects this may occur from time to time in the future. As a result of these
possible fluctuations, the company's actual results may differ from our
projections. Other factors that could cause such differences include pace and
timing of additional acquisitions, the company's ability to realize cost
savings and efficiencies, competitive and general economic conditions, and
other risks described in the company's filings with the Securities and
Exchange Commission.
FTI is on the Internet at http://www.fticonsulting.com .
SOURCE FTI Consulting, Inc.
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Related links:
http://www.fticonsulting.com
CONTACT:
Jack Dunn, Chairman & CEO of FTI Consulting,
Inc., +1-410-224-1483, or General, Marilyn Windsor,
+1-702-515-1260, or Analysts, Lisa Fortuna, +1-312-640-6779, or
Media, Tim Grace, +1-312-640-6667, all of FRB Weber Shandwick
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