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June 28, 2010

‘Vantis reorganisation assured’: HLB International

HLB International chief executive Rob Tautges has confirmed UK member firm Vantis will shortly undergo a corporate restructure but it is unclear exactly how this will take shape.

The Alternative Investment Market-listed company is due to make an announcement on its future either late this afternoon GMT or early tomorrow.

Tautges, who has been monitoring the situation closely for months, said details about the restructure are confidential due to the fact Vantis is publicly-listed. He is hopeful enough of the company remains in tact so that it may continue to operate as a member of the mid-tier network

“A reorganisation is virtually assured but what nature it takes we haven’t gotten final word on,” Tautges said. “We have some great people at Vantis that have been great contributors to HLB in the past, and it’s my view that there is a good chance they will continue to be contributors but perhaps under a different reorganised company.”

Reorganisation options

The Vantis reorganisation could take on several flavours, such as a corporate takeover, or a management buyout of some or all portions of the business.

This week the company’s training arm, PASS Training, which provides CPD education in accounting and finance, was acquired by SWAT UK.

It is likely that a Vantis restructure would be a combination of a management buyout and external acquisitions.

“Under best circumstances, if that management buyout ends with a sizable firm that we think would fit HLB’s mission then we would [like them to continue membership] but that would be evaluated after we know the facts and circumstances around the reorganisation,” Tautges said.

A new strategy?

As is normal procedure, HLB International has been monitoring the market for potential replacement firms should Vantis no longer continue to serve the network. The network confirmed it could adopt a new approach to UK coverage.

“It’s my view that HLB will come out stronger in the UK for a number of different reasons I can’t go into detail about right now, that’s what my speculation is at this point,” Tautges said.

“I think we have an opportunity to expand geographic coverage, I think we have an opportunity to have a collection of firms rather than have sole reliance on a publicly traded entity.”

Vantis speculation in the media and industry has been rife since its shares were suspended in June and chief executive Peter Jackson and partner Nigel Hamilton-Smith resigned as directors.

Stanford hangover

Vantis’s troubles stemmed from highly publicised fee payment delays for insolvency work it carried out on Stanford International Bank. This caused Vantis’s auditor Ernst & Young to issue an emphasis of matter paragraph in its February audit opinion.

The publicly-traded company also suffered reputational damage for its involvement in aggressive tax schemes, which led to the removal of guilty partners.

Vantis is the 13th largest professional services firm in the UK. It reported revenue of £89.6m in the year to 30 April 2009.


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