Government advisory firm PFM Group has bought one of its competitors, Chicago-based public-private partnership consultancy Scott Balice.
The announcement of the sale comes on the same day that Scott Balice co-founder Lois Scott officially leaves the firm to take up a position in the administration of newly-elected Chicago Mayor Rahm Emanuel. Scott will be serving as the city’s chief financial officer.
PFM said in a statement that the acquisition will make the firm “a leader with Midwest clients” as well as “experts in the emerging field of public-private partnerships”.
PFM said Scott Balice will operate as a wholly-owned subsidiary of PFM Group, and co-founder Dean Balice will serve as the subsidiary’s managing director. PFM also said it also plans to launch a corporate advisory practice with Balice. PFM did not disclose financial terms of the acquisition.
Scott Balice advises on debt management, restructurings, bankruptcies and derivatives, in addition to public-private partnerships. The firm advised the cities of Pittsburgh and Los Angeles on potential privatisations of their parking systems, but both transactions failed because their respective city councils voted them down.
“I think that this is an opportune time to be thinking about growing this type of [public-private partnership] advisory business,” Tom Morsch, managing director at Scott Balice, said in an interview. That's becasue “the continued financial stress that many governments are facing will remain”, Morsch added.
But the merger with PFM happened somewhat abruptly. Scott, in assuming in her new role as Chicago chief financial officer, had to divest her interest in the company, which led to discussions and ultimately the merger with PFM, according to Morsch.
“We're learning about each other. This acquisition happened quickly and we are going to learn about the breadth and depth of PFM's activities,” Morsch said.
Philadelphia-based PFM, or Public Financial Management, was established in 1974, and advises US non-profits and governments. It forms part of a group of companies that includes PFM Asset Management, which has about $42 billion in assets under management, according to the statement.
PFM’s clients include the Maryland Port Administration, which recently established a public-private partnership with Highstar Capital to construct a new berth at the Port of Baltimore's Seagirt Terminal. Other clients include the cities of Seattle, Philadelphia, and Boston, the State of Wyoming, the Commonwealth of Pennsylvania, the Massachusetts Port Authority, and the Kansas Department of Transportation, according to the firm's website.