Make room for a man who’s got friends on Wall Street.
That appears to have been the driver behind Accenture’s decision to hire Harry You as its new CFO. The company’s CFO for the past four years, Mike McGrath, is being moved over to the less prominent post of treasurer.
The IT consulting firm, which was known as Andersen Consulting until the beginning of the year, is tentatively scheduled to go public on July 17, with You’s former employer, Morgan Stanley, as the co-lead underwriter.
You ran the information services group within the investment bank’s corporate finance department, where managing securities offerings was one of his responsibilities. He helped lead the syndicate for KPMG Consulting’s initial public offering in February, and he has also been working on the offering for PricewaterhouseCoopers Consulting, which is scheduled to go public either this year or next.
Publicly, Accenture is maintaining that You had not been involved with its deal. Still, the change in CFOs does raise some interesting questions. Foremost among them: Is the Accenture deal in trouble and was You hired to fix the problem?
Executives at Accenture and Morgan Stanley could not be reached for comment, and You was not available. But other people familiar with the job switch say You was brought on largely because he was the best candidate.
E. Peter McLean, a partner at the executive recruitment firm Spencer Stuart, which led Accenture’s CFO search says, “They were certainly looking for someone who was well connected to Wall Street, because no one at the company has been on the front lines with quarterly reports and public disclosure.” You’s investment-banking skills and his ability to market IPOs to investors were crucial factors in the decision-making process, McLean says.
“Harry really knows the capital markets and has for years been closely connected with professional services firms and their financial requirements,” McLean says. “He knows the sector well, is very familiar with the complications of taking private partnerships into a public setting, and knows the financial drivers that make professional services firms successful.”
He adds, “You has real credibility with the portion of Wall Street that covers professional services.”
Martin Ressinger, an analyst at Fitch Inc., says, “All of a sudden they are going to have a huge new constituency, which is public shareholders, and Accenture is not used to dealing with that.”
One of You’s primary strengths will be marketing, says Randall Roth, research analyst at Renaissance Capital, a Greenwich Conn., money manager that specializes in new stock offerings. It’s important for any public company to have a CFO who can articulate its financial results to investors, the press, and the board, and You fit the bill.
Still, Accenture’s decision to bring in a new CFO only a few weeks prior to its IPO comes at a time when the public markets have had little enthusiasm for the technology- consulting sector. For example, KPMG’s shares are trading below their initial offering price of $18 in February.