Shares of KPMG Consulting LLP jumped 30 percent Friday in an initial public offering that raised US$2 billion that the company will use to expand its Web and technology projects.
KPMG Consulting, which debuted on the Nasdaq shortly after noon, opened at $18 and quickly rose $5.31, to $23.31.
The IPO positions the company to make acquisitions in the struggling Internet consulting sector, which has suffered as Net companies wrestle for profitability. Earlier this week, one of the Web's oldest consultancies, Razorfish (RAZF) , laid off 400 employees as part of an aggressive cost-cutting program to regain profitability.
KPMG Consulting's move will be closely watched by other large consultancies that grew out of traditional accounting firms and that are now considering public offerings. Newly adopted Securities and Exchange Commission regulations have encouraged the firms to separate from their original partners. The regulations are designed to mitigate conflicts of interest that could arise when a firm's consulting and accounting units have the same company as a client.
One of the largest consulting firms, Accenture, recently separated from accounting firm Arthur Andersen. The firm's partners voted in mid-October to consider an initial public offering later this year.
KPMG Consulting is separating itself from its parent accounting arm, KPMG LLP. More than 70 percent of the shares offered were previously owned by KPMG LLP, one of the world's largest accounting firms.
(More to come.)