FTI Consulting Expands in Asia - Analyst Blog
On April 1, FTI Consulting Inc. (FCN) announced the acquisition of Baker Tilly Hong Kong Business Recovery Ltd. (BTHKBR), a Hong Kong based forensic and litigation consulting company. Post the acquisition, BTHKBR will be merged with the Forensic and Litigation Consulting segment of FTI Consulting in Asia. Moreover, BTHKBR will now be known as FTI Consulting (Asia) Ltd. However, the terms and value of the deal remain undisclosed.
The acquisition of BTHKBR is expected to be a strategic step to boost FTI Consulting’s service offerings in the rapidly expanding Asian regions. With the help of Chinese professionals, who are proficient in the language and geography, the company plans to execute its operations not only in Hong Kong but also in China and Taiwan.
BTHKBR provides forensic accounting, litigation support and restructuring services, including business valuation and financial due diligence. These services are compatible with FTI Consulting’s Forensic and Litigation Consulting segment, thereby adding value and capacity to the company’s existing consulting offerings in Asia.
On the other hand, merging with FTI Consulting will provide BTHKBR with additional synergies to capitalize on the former’s already existing strong global network.
Earnings Recap
FTI Consulting’s fourth quarter earnings of 71 cents per share came in 2 cents short of the Zacks Consensus Estimate but were significantly higher than the 56 cents per share in the prior-year quarter due to disciplined expense management and fewer share count.
We believe that the growth of the company’s Forensic and Litigation Consulting segment through the acquisition of BTHKBR is crucial for FTI Consulting since a dramatic deceleration is expected in the company’s Corporate Finance and Restructuring segment, for 2010.
Also, Technology and Strategic Communication experienced weakness due to restricted growth in the fourth quarter. Hence, the company is banking on its Forensic and Litigation Consulting segment to augment the desirable growth in the near future. Nevertheless, we remain on the edge to notice any further development in this regard.
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