Management Consulting Share Discussion Threads

[welsheagle] 19/9/2007 07:34

Management.Cons.Grp Acquisition


RNS Number:0858E
Management Consulting Group PLC
19 September 2007


Management Consulting Group PLC
19 September 2007

Not for release, publication, or distribution in or into the United States of
America, Australia, Canada or Japan

FOR IMMEDIATE RELEASE

Management Consulting Group PLC

Proposed acquisition of Kurt Salmon Associates, Inc.

Summary

Management Consulting Group PLC (''MCG'' or the ''Company'' and together with
its subsidiaries, the ''Group''), the international management consultancy
group, today announces that it has entered into a conditional agreement whereby
it will acquire, by way of merger, the entire issued share capital of Kurt
Salmon Associates, Inc. (''KSA''), a leading international management consulting
firm specialising in services to consumer product suppliers, retailers and
health care providers.

The total consideration agreed for the Acquisition is US$125.0 million (#62.7
million), which will be satisfied by the payment of US$75.0 million (#37.6
million) in cash, the issue of 48,278,793 New Ordinary Shares (the number of
which may be adjusted to up to a maximum of 53,643,103 New Ordinary Shares or
down to a minimum of 43,889,812 New Ordinary Shares pursuant to the Share
Consideration Adjustment) and the grant of options over 6,293,124 Ordinary
Shares in exchange for KSA Options (the number of Ordinary Shares the subject of
options may be adjusted to up to a maximum of 7,471,466 Ordinary Shares or down
to a minimum of 5,525,105 Ordinary Shares).

The cash element of the consideration will be funded from a new Euro81,450,000 and
US$111,325,000 multicurrency debt facility which will also be used to refinance
the Group's existing borrowings and to provide further working capital and
acquisition capital.

The Acquisition is in line with the Group's strategy of delivering profitable
and sustainable revenue growth by broadening and deepening its consulting
offerings.

Excluding one-off integration costs and the amortisation of intangibles, the
Board believes that the Acquisition will enhance earnings per share in the year
to 31 December 2008.(1)

The KSA Vendors will, immediately following Completion and assuming there is no
Share Consideration Adjustment, together hold 48,278,793 Ordinary Shares
representing 14.9 per cent. of the Enlarged Share Capital (or 16.3 per cent. if
the Share Consideration Adjustment results in the maximum upwards adjustment in
the number of New Ordinary Shares).

Commenting on today's announcement, Rolf Stomberg, Chairman of MCG, said:
''This acquisition is a key development in the execution of the Group's
strategy. KSA is a well managed and profitable business with growing revenues.
It has a strong foothold in the US, the world's largest consulting market, and a
high quality client base. The combination of this business with our existing
portfolio will benefit all stakeholders.''

Kevin Parry, Chief Executive of MCG, said:
''I am delighted that the KSA management team and staff are joining MCG. The
deal provides a strong platform for further growth. It expands our consulting
offering and geographic reach, deepens our talent pool and creates opportunities
to cross sell our service offerings to the enlarged client base.''

Mark Wietecha, Chairman of KSA, said:
''Our ability to advance the success of clients and drive superior results
stands at an all time high, and becoming part of MCG's worldwide portfolio of
brands strengthens and expands our capabilities. MCG provides KSA access to a
larger base of resources to further advance our vision and strategy as a premier
management consulting firm in an increasingly dynamic global market. We look
forward to working with MCG's management team to further grow and develop KSA's
business for the continued benefit of our clients and employees. ''

Overview of KSA

KSA is headquartered in Atlanta and has a network of offices throughout North
America. It has operations in Europe and Asia and partnership relationships in
India and Spain. The Group employs approximately 550 people and was ranked as
one of the ''Ten Best Consulting Firms to Work For'' by Consulting Magazine in
each of the six years from 2002-2007.

KSA operates through two divisions: the Consumer Products and Retail Division
and the Health Care Division. The Consumer Products and Retail Division operates
internationally, principally in North America, Europe and the Asia Pacific
region. The Health Care Division operates primarily in the United States.

The Consumer Products and Retail Division consults on business growth, inventory
efficiency, margin management, productivity improvement, technology
effectiveness programmes and supply chain management. Its services address
strategy, processes, organisation and technology support in the core areas of
merchandising, inventory and supply management. Clients include AEON, Carrefour,
The Home Depot, J Sainsbury, Macy's, Proctor & Gamble, Sara Lee and Wal-Mart.
The revenues of the Consumer Products and Retail Division in the year ended 31
December 2006 were approximately US$125 million, approximately 66 per cent. of
which related to the United States, approximately 25 per cent. to Europe and
approximately 9 per cent. to the Asia Pacific region.

The Board believes that the size of the global markets for consulting services
to the consumer products and retail industry sectors is approximately US$12
billion and US$13 billion respectively and that the growth in those markets will
be between six and ten per cent. per annum over the next three years.

The Health Care Division consults on strategy, facility planning and IT to
hospitals, medical centres and physician group practices. Its services address
strategic planning, clinical programme planning, organisation and governance,
facility and operational planning and consulting services related to IT
strategy, system selection, negotiation and project management. Clients are
typically major private sector hospital providers in the United States and
include John Hopkins Hospital, The Mayo Clinic, Cleveland Clinic and the UCLA
Medical Center. The Health Care Division has also provided consulting services
to health care providers in the Middle East including Saudi Arabia, Qatar and
the United Arab Emirates. The revenues of the Health Care Division in the year
ended 31 December 2006 were approximately US$28 million.

The Board believes that the size of the global market for consulting services to
the health care sector is approximately US$25 billion, and that the growth will
be approximately six per cent. per annum over the next three years.

Benefits of the Acquisition

The Board believes that the Acquisition is an important step in the execution of
the Group's strategic goals. In particular, the Board believes the Acquisition
will have the following key benefits:


Operational

* Secures an international market leader in consulting to the consumer
products and retail sectors and a strong health care practice in the United
States

* Broadens the Group's range of industry-led consulting offerings in
sectors where it is not currently strong

* Strong KSA brand raises the Group's profile in the United States, Europe
and Asia

* Deepens the Group's talent pool with internationally experienced
principals

* Increases the Group's client base and enables it to cross sell its
services to that enlarged client base


Geographic

* Rebalances the Group's mix of revenues towards the world's largest
consulting market, the United States, following the acquisition of Ineum
with its substantially European business in 2006

* Provides complementary consulting offerings in geographies where the
Group is already well established

* Increases the Group's Asian presence

* Provides a platform for further development in growing markets


Financial

* Adds a well-managed and profitable business with growing revenues

* Expected to be earnings enhancing in 2008 before one-off integration
costs and the amortisation of intangible assets(2)

* Creates an opportunity to reduce unit infrastructure costs

* Offers a more balanced revenue mix in terms of market and service
offerings and so spreads the risks inherent in the Group over an enlarged
portfolio of businesses


Shareholder approvals

The proposed Acquisition constitutes a Class 1 transaction under the Listing
Rules. Accordingly, it is subject to the approval of Shareholders, which is to
be sought at an Extraordinary General Meeting expected to be held on 11 October
2007.

A circular (also comprising a prospectus for the purposes of Part VI of the
FSMA) (the ''Circular'') containing full details of the proposed Acquisition is
expected to be sent to Shareholders on or shortly after 21 September 2007.

Current trading and prospects

The Board gave an update on trading at the time of its interim results published
on 13 August 2007 and reported that Ineum Consulting's inaugural contribution to
the first half results showed significant like-for-like growth and Proudfoot
Consulting performed slightly better than in the second half of last year.
Parson Consulting's results were mixed. The outlook for the Group has not
changed since that announcement and the Board remains confident that the Group
will show good progress in 2007.

Revenue of KSA for the period from 1 January to 11 August 2007 was approximately
18 per cent. ahead of the comparable period last year.

The Board has a confident outlook for the Enlarged Group's performance for the
remainder of 2007.

The information in this summary should be read in conjunction with the main body
of this announcement.

There will be an analysts' presentation at 9.30 a.m. today at the offices of MCG
on the 6th Floor of Fleet Place House, 2 Fleet Place, Holborn Viaduct, London
EC4M 7RF.

[reeltime] 11/9/2007 20:49

Looks like someone has had enough?

[reeltime] 07/9/2007 11:42

I found this, don't know if it is of any use:-


Management Consulting downgraded to "hold"

Date: 2007-09-06 7:56 AM

Analyst: Panmure Gordon & Co
Subject: Europe
Rating: Hold

LONDON, September 6 (dailywallstreet.com) - Analysts at Panmure Gordon downgrade Management Consulting Group (ticker: MMC-GBX) from "buy" to "hold." The target price is set to 55p.

In a research note published this morning, the analysts mention that the company has acquired US-based CBH for $10.6 million. The acquisition is expected to be neutral to Management Consulting's 2007 EPS and accretive to the company's 2008 EBIT by £0.5 million, the analysts say. The downgrade in rating follows the recent appreciation in the company's share price, Panmure Gordon adds.

[qs9] 06/9/2007 07:26

Looks like another decent deal for MMC this morning and decent new business line...

[qs9] 03/9/2007 22:42

At last some decent movement upwards....still cheap as chips IMO....if you pardon the expression.....brokers all still +ve, good newsflow, Welsheagle's post above provides some good value parameters and hopefully next set of newsflow will merely reinforce belief that this should be nearer 65p+ not single digit p./e DYOR etc

[welsheagle] 21/8/2007 20:55

From August's 'Company Refs', when price was 48p:-
a/ Prospective PE ratio of 7.70 (based on four broker forecasts, three recommending 'buy', and one recommending 'overweight').
b/ Forecast growth in eps of 13.2%.
c/ Net asset value per share of 41.4p.
d/ Dividend yield of 2.25%.
e/ Turnover up from £107m to £147m in last five years.
f/ Price to sales ratio of 0.69.

[qs9] 13/8/2007 21:32

good results, good confidence, up nicely, still dirt cheap IMO. Nice to see an interim divi as well. Am contiuing to hold for the long-term.

[welsheagle] 13/8/2007 20:42

LONDON (Thomson Financial) - Management Consulting Group PLC reported higher pretax profits for the first half helped by a 49 pct jump in sales, and said it is confident for the future backed by a solid order book.

The company's first-half pretax profit rose to 7.47 mln stg from 7.32 mln stg in 2006 as revenues surged to 100.5 mln stg from 67.3 mln stg.

Profit from operations before non-recurring items and amortisation rose 55 pct to 10.2 mln stg.

Selling and underlying administrative costs increased due to the acquisitions of Ineum and Salzer, leading to one-off integration costs of 1.3 mln stg. The remaining non-recurring costs to be incurred in the second half will be less than 0.5 mln stg, Management Consulting said.

The company added that Ineum Consulting, which is now completely integrated with the group, performed robustly ahead of its expectations and is clearly earnings enhancing.

Looking ahead, the company said the current order book on a like-for-like basis is significantly higher in both Ineum Consulting and Proudfoot Consulting and marginally higher in Parson Consulting.

The pipelines of work are good, it added.

Management Consulting set an interim dividend of 0.33 pence a share.

[welsheagle] 13/8/2007 20:38

Panmure Gordon reiterated their 'buy' recommendation today, with a target price of 55p.

[welsheagle] 13/8/2007 07:50

LONDON (Thomson Financial) - Management Consulting Group PLC reported higher
pretax profits for the first half helped by a 49 pct jump in sales and said it
is confident for the future as its order book is solidly ahead of its position
in the year-ago period.
First-half pretax profit rose to 7.47 mln stg from 7.32 mln stg in 2006 as
revenues surged to 100.5 mln stg from 67.3 mln stg.
Profit from operations before non-recurring items and amortisation rose 55
pct to 10.2 mln stg.
Management Consulting set an interim dividend of 0.33 pence a share.

[welsheagle] 13/8/2007 07:49

Management.Cons.Grp Interim Results


RNS Number:9444B
Management Consulting Group PLC
13 August 2007


Financial results for the six months ended 30 June 2007

Management Consulting Group PLC ("MCG" or "the Group"), the international
management consultancy group, today announces its results for the six months
ended 30 June 2007.

Key points

* Revenue up 49% on last year at #100.5 million (2006: #67.3 million)
* Profit from operations before non-recurring items and amortisation of
acquired intangibles up 55% to #10.2 million (2006: #6.6 million)
* Profit from operations up 20% to #8.3 million (2006: #6.9 million)
* Profit before tax and amortisation of intangibles up 11% at #8.1 million
(2006: #7.3 million)
* Basic earnings per share of 1.9 pence (2006: 2.9 pence)
* Earnings per share excluding amortisation of acquired intangibles and
non-recurring items of 2.6 pence (2006: 2.7 pence)
* Current order book solidly ahead of last year on like-for-like basis
* Ineum Consulting fully integrated and performing ahead of expectations
* Interim dividend of 0.33 pence (2006: nil)


Rolf Stomberg, Chairman:

"In the light of the Group's increased size and diversity of consulting
offerings, the board has decided to re-commence the payment of an interim
dividend. The dividend has been set at one-third of the total pay out in respect
of 2006 at 0.33 pence per share which will smooth the return to shareholders
over a year."

Kevin Parry, Chief Executive:

"This is the first set of results that include Ineum Consulting in the Group for
an entire reporting period. I am delighted that its integration has been
completed in a timely manner. Ineum has performed robustly, ahead of our
expectations at the time of its acquisition, and is clearly earnings accretive.

The Group's order book is solidly ahead of its position last year. For all our
businesses the pipelines of work are good and allow us to look to the future
with confidence."

[kneath] 07/8/2007 16:40

Do we have any idea what the expectations are? If anyone tells me 'positive and it's in the price'....my sides will surely split!

[welsheagle] 05/8/2007 18:12

They were out on 7th August last year, and 5th August the year before.

[afpk53] 05/8/2007 15:28

Aren't the interims due soon on this one?

[kneath] 03/8/2007 13:41

Zzzzzzzzzzzzzzzzzzzzzzz!

[qs9] 26/7/2007 17:14

any views? Looks like little upgrade from my screens, but still down on the day! Hopefully just tracking sideways until next newsflow.

[qs9] 22/7/2007 11:14

MMC been creeping up slowly....$ must be hurting them, but 1/2 year just ended and have not seen any downward movements in forecasts so assuming IMO that this still looks very cheap. Opinions?

[kneath] 16/7/2007 11:35

If they do, they conceal it well. Jeez this is a corpse. Still got 50% of my original stake and would love a brief rise to unload it!

[stemis] 04/7/2007 17:54

Doesn't look like the market really believes it.

[welsheagle] 03/7/2007 19:57

Daily Mail article today:-
'Hungry private equity groups have got their eyes on Management Consulting group, at 49p. Leading shareholders of the struggling support services group, who are said to be miffed at recent underperformance, are rumoured to have been asked to name a price for their stake. One is believed to be ready to accept 64p a share. If true, a full scale offer would soon follow. Candover and 3i are two names in the frame'.

[welsheagle] 03/7/2007 19:57

Daily Mail article today:-
'Hungry private equity groups have got their eyes on Management Consulting group, at 49p. Leading shareholders of the struggling support services group, who are said to be miffed at recent underperformance, are rumoured to have been asked to name a price for their stake. One is believed to be ready to accept 64p a share. If true, a full scale offer would soon follow. Candover and 3i are two names in the frame'.

[scumdog] 08/6/2007 23:47

Ah ha! I reckon poor visibility of earnings - short-term contracts the norm - is why this company is lowly rated.