SYDNEY, June 23 Reuters PricewaterhouseCoopers Australia is looking to sell its government, education and healthcare practice to private equity firm Allegro Funds, according to a person familiar with the matter, as the firm battles the fall out from a major scandal.

The scandal, which first broke in January, centres around a former PwC tax partner who had been advising the federal government on laws to prevent corporate tax avoidance and shared confidential information with colleagues who then used it to pitch to multinational companies for work.

While the scandal began in PwC39;s tax practice it has tainted the more lucrative government consulting business as a growing number of departments and organisations, including the Reserve Bank of Australia, pause or review work with the big four professional services firm.

A term sheet for a potential deal has been drawn up, the Australian Financial Review said when it first reported the story on Friday.

The sale could include roughly 100 partners and 1,000 staff, or 10 of the firm, the AFR added. PwC Australia made A3 billion 2.01 billion in revenue last financial year.

A spokesperson said PwC does not comment on market speculation when asked for a response. Allegro Funds did not immediately respond to a request for comment. The person familiar with the sale plan could not be named as the information had not yet been made public.

Allegro Funds describes itself as a restructuring specialist with over A4 billion 2.68…