FTI Consulting Buys CDG Group to Boost Restructuring Unit

Management services provider FTI Consulting, Inc. FCN recently acquired CDG Group, an investment banking firm that provides financial advisory services to small and mid-sized public and privately held companies, for an undisclosed amount. The strategic transaction is aimed at augmenting the company-side and interim management capabilities within its restructuring business in North America.

Based in New York, CDG Group offers restructuring advisory, turnaround management, value enhancement and transaction advisory services to diverse companies across various sectors. Led by Robert Del Genio, the company brings to the table a rich human capital comprising 19 professionals that include five senior Managing Directors. These professionals are widely recognized in the industry for their impressive track record, impeccable practical knowhow and business acumen.

As part of the transaction, Del Genio along with his team will join the Turnaround & Restructuring practice within FTI Consulting’s Corporate Finance & Restructuring segment in the New York Metro region. This business division helps management to quickly ascertain the key issues and take proactive steps to stabilize finances and operations of the company. Experts within this division also offer liquidity forecasts, cash-flow management and additional financing for distressed clients, as well as loan covenant waiver negotiations and complex debt restructuring guidance. Furthermore, the business unit provides analytical and advisory services to lenders and unsecured creditors of distressed borrowers.

With complementary services, CDG Group is a perfect fit for FTI Consulting and will enable it to strengthen its position in the North American market. On the other hand, FTI Consulting will offer an ideal platform to CDG Group to better serve its customers. The transaction, therefore, is a win-win deal for both the companies.

Such opportune acquisitions are likely to lift the sagging shares of FTI Consulting that have underperformed the Zacks categorized Consulting Services industry with a year-to-date decline of 24.9% as against a gain of 5% for the latter. Despite improving corporate earnings and a strong liquidity, clients’ spending patterns remain cautious, given concerns over the current market environment, volatile financial markets and a lack of visibility regarding the impact of future tax and regulatory policies. The changes in capital markets, legal or regulatory requirements and general economic factors beyond control could further hamper demand for services, thereby affecting the company’s profitability.

FTI Consulting currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include NV5 Global, Inc. NVEE, Exponent, Inc. EXPO and Gartner, Inc. IT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

NV5 Global has a long-term earnings growth expectation of 20%. It topped earnings estimates twice in the trailing four quarters with a positive surprise of 1.8%.

Exponent has a long-term earnings growth expectation of 12%. It topped estimates twice in the trailing four quarters with an average positive earnings surprise of 1.1%.

Gartner has a long-term earnings growth expectation of 17.3%. It surpassed estimates thrice in the trailing four quarters with an average positive earnings surprise of 4.6%.

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