TPI and EquaTerra, two of the industry’s leading outsourcing consulting firms, have terminated their merger plan, which was made public late last year and signed in February. The March 10 announcement, which came as a surprise to even some employees of both firms, followed recent disclosure by executives of both companies that it had gone as far as picking out a new name, Veritage, for the merged organization.
The companies issued a short statement about the termination without citing the reason for the breakup, however, sources close to the deal said the two sides failed to agree on one term that caused the deal to break down. The termination was only disclosed earlier this week to employees of both firms.
Stephanie Nelson, a spokesperson for Houston-based TPI, declined to comment on the cause of the breakup and said the company could only disclose that the proposed deal had ended.
A source at EquaTerra, however, confirmed that a last-minute hitch led the two sides to break off the merger.
“An internal issue that could not be agreed upon surfaced very late in the merger process. It was not an issue that would have an impact on either of the firm’s clients or the marketplace. It was simply an impasse in the negotiations that led to a mutual decision to end the agreement,” the source said. “It was a very difficult decision for both firms to make, as the synergies between the two firms and the market opportunities remain strong and positive. Further, both firms’ clients felt limited impact when the merger announcement was made, and will see business as usual following this announcement.”
The two companies had talked extensively about the merger since it was announced in late 2005, going as far as revealing its new identity, a hybrid of the words value and heritage. However, signs that the deal was in trouble began to emerge in late February when the companies asked to be identified in the press by their separate names. Initially, company officials made the request because there had been a delay in closing the merger but said nothing about problems with reaching an agreement on critical terms.
The merged organization would have had a combined total of 550 employees in Europe, the Americas and Asia-Pacific with global advisory services to all industries and business support functions, including human resources, finance and accounting, procurement, IT, and customer relationship management. It also would have been the largest outsourcing advisory firm in the world.