The consulting giant Alvarez & Marsal has given itself a potential stock market valuation of up to $18 billion in a private meeting with partners, it can be revealed, amid a wave of deals for professional services firms.
Chief executive Bryan Marsal, one of the firm’s patriarchs, gave a presentation at an A&M away day in Portugal last month that included a slide with a potential price tag of between $16 billion and $18 billion (£13.5 billion) if the business were to list. It is the first time that A&M has been valued.
The meeting was attended by several senior executives and among those present was the firm’s managing director, Paul Aversano, an 18-year A&M veteran who leads its deals business.
Those briefed on the presentation said Marsal made reference to AlixPartners, a fast-growing rival professional services firm that, like A&M, is known for its prowess in corporate restructurings. Alix has hired Goldman Sachs ahead of a stake sale. On the basis, Marsal reasoned, that analysts have speculated that Alix could be worth $8 billion, his firm could fetch roughly twice this figure, were it to float.
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Despite this, some bankers expressed doubt that A&M could fetch such a bumper figure in a transaction.
A&M declined to comment. Sources close to the firm said it had no intention of listing in the near term and that Marsal was speaking hypothetically.
The New York-based Alvarez & Marsal employs 10,000 people across 39 countries and has annual global revenues of about $5 billion, according to senior insiders. It is best known for its restructuring arm, which is overseeing two of the highest-profile company collapses in decades: Sam Bankman-Fried’s crypto firm, FTX, and the co-working company WeWork.
A&M was founded in 1983 by Bryan Marsal and his co-chief executive Antonio Alvarez II. It made its name working on the restructuring of the Enron auditor Arthur Andersen and, during the financial crisis, of the stricken bank Lehman Brothers, where Marsal became chief executive for three years.
In the UK and Europe, it has advised Pret A Manger, Rolls-Royce, the government of Switzerland and the lenders to Thames Water’s parent company, Kemble.
Despite its size, Alvarez & Marsal is unique in being controlled by its two founding families, who still own about 50 per cent of the firm, with the rest being held by equity partners. While some senior partners have built stakes into the millions, A&M is thought to be reluctant to dilute the share held by the families to less than 50 per cent.
Many in the City have wondered how A&M’s unusual structure can handle a succession plan. The founding pair are both well into their seventies and Alvarez’s two children hold leadership positions in the firm. Antonio III (known as T3) manages the European outpost and his younger brother Nick Alvarez is stationed in the US leading A&M’s private equity practice.
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For decades, private equity houses have approached A&M hoping to buy out the two founding families, but both have resisted. A potential stock market listing would be another resolution to what some call “the succession question”, but the firm has maintained that it will continue to operate under its family structure, which it believes ensures long-term stewardship.
Antonio Alvarez III told The Sunday Times last year: “We are a firm that is training leaders how to lead because they’re leading in their business. They’re leading with their clients. They’re taught how to lead.”
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Any deal for a listing or stake sale in A&M would come amid a wave of investor interest in professional services. AlixPartners’ stake sale is likely to lead to its minority owners — a clutch of sovereign wealth funds, private equity firms and Canadian pension funds — more than doubling their money. In the UK, the accountancy sector has also been subject to a raft of private equity deals — the largest being Grant Thornton, the UK’s sixth-largest auditor, which sold a stake to Cinven last year.
