MMC Management Consulting Group Plc

RNS Number:2838E
Management Consulting Group PLC
29 May 2001


For immediate release                                               29 May 2001



      Management Consulting Group acquires European consulting business



Management Consulting Group PLC ('Management Consulting Group') today
announces that it has agreed to acquire Czipin & Partner Managementberatung
GmbH and its subsidiary companies ('Czipin & Partners'), a consulting group
that operates principally in Austria and Germany.



Completion of the acquisition is expected to take place on 31 May 2001.  The
base consideration, payable in instalments over three years, amounts to
Euro17.4 million (#10.6 million) in cash and Management Consulting Group
ordinary shares. The consideration payable on completion is Euro6.7 million (#
4.1 million) comprising Euro3.6 million (#2.2 million) in cash and Euro3.1
million (#1.9 million) in ordinary shares.



Based upon the revenues of Czipin & Partners for the year ended 31 December
2000 the base consideration, net of cash acquired, represents 1.1 times
revenue.  The revenues of Czipin & Partners grew at a compound annual rate of
19% in the two years ended 31 December 2000.



Czipin & Partners will be merged with Management Consulting Group's existing
operational consulting business, Proudfoot Consulting.  The merged business
will trade as Czipin & Proudfoot Consulting in Austria and Germany.



Commenting on the acquisition, Kevin Parry, chief executive of Management
Consulting Group, said:



'This acquisition, following the acquisition of IMR last December, is a
further major reinforcement of our capabilities in Continental Europe.  In
particular, the acquisition of Czipin & Partners significantly strengthens our
ability to provide services in the German-speaking regions of Europe.



We regard Germany - the largest economy in Europe - as a particularly
attractive area for growth.   Many of its industries are going through a
period of restructuring.   The services that Czipin & Partners and Proudfoot
Consulting can provide to improve operational efficiency are of particular
value to all companies who focus on productivity enhancements in either their
sales, cost or overhead structures.'



Alois Czipin, managing director of Czipin & Partners said:



'All of the 11 partners are delighted that we are merging our business with
Proudfoot Consulting.  The combined business will have the resources and
commitment to make a major impact in the German-speaking market place.
Following extensive discussions on the operational aspects of the enlarged
business my existing colleagues and I are looking forward with great
enthusiasm to working with our new Proudfoot Consulting colleagues.'



Information on Czipin & Partners



The business of Czipin & Partners is similar to that of Proudfoot Consulting,
the main business currently owned by Management Consulting Group.  Like
Proudfoot Consulting, Czipin & Partners assists clients in redesigning
business processes and implementing changes that measurably improve financial
performance.  Czipin & Partners employs approximately 100 people.



The revenues of Czipin & Partners for the year ended 31 December 2000 amounted
to Euro14.1 million (#8.5 million) and the profit before tax amounted to
Euro1.9 million (#1.1 million).  The net assets of Czipin & Partners at 31
December 2000 amounted to Euro1.9 million (#1.1 million).



Details of the acquisition



The base consideration for the acquisition is Euro17.4 million (#10.6
million).  Of this amount Euro3.6 million (#2.2 million) will be paid in cash
on completion and Euro4.4million (#2.7 million) is payable in cash in three
equal annual instalments the first of which falls due on 31 May 2002.  The
balance of the base consideration, amounting to Euro9.4 million (#5.7 million)
is payable in three annual tranches of Management Consulting Group ordinary
shares, each of equal value.  The three tranches of Management Consulting
Group ordinary shares will be allotted based on the Management Consulting
Group share price as at the close of business on 30 May 2001, 31 May 2002 and
31 May 2003, respectively.



The vendors of Czipin & Partners, all of whom are active in the business of
Czipin & Partners, may not dispose of any Management Consulting Group shares
acquired as a result of this transaction until 1 June 2004.  Thereafter the
shares may be sold progressively over a minimum of two years.  Additional
consideration may become payable on 31 May 2008 if the value of any Management
Consulting Group shares still held by the vendors of Czipin & Partners on 31
May 2006 is less than the average price at which they were allotted.  Any
additional consideration is payable in cash or Management Consulting Group
shares at Management Consulting Group's option.    Such additional
consideration is reduced by any notional profit (relative to the value on 31
May 2006) that could have been made had the shares been sold earlier and also
by any increase in the value of the shares between 31 May 2006 and 31 May
2008.  The additional consideration will not exceed the value at which any
shares still held on 31 May 2006 were originally allotted.



The acquisition is expected to be earnings enhancing in the current financial
year.



For further information please contact:
Management Consulting Group:
Dr Rolf Stomberg, Chairman               Kevin Parry, Chief Executive
+49 172 413 3799                         +44 7798 742225

Buchanan Communications:
Richard Darby/Richard Oldworth
+44 20 7466 5000



Additional background information



Management Consulting Group has been led by Kevin Parry as chief executive
since 1 January 2000. Management Consulting Group changed its name from
Proudfoot Consulting PLC on 2 January 2001



The existing businesses of the group specialise in operational consulting
which means that they redesign sales, cost and overhead processes in client
companies and use change management techniques to train people in those
redesigned processes. Each project is designed so as to provide measurable
financial benefits to the client and the operational changes are always
implemented in partnership with the client.



Czipin & Partners was founded in 1985 by Alois Czipin, its major shareholder
and managing director.  It is now one of the leading operational consulting
businesses in its home country of Austria and also has significant operations
in Germany.



Notes



The Euro/Sterling exchange rate used in this document is 1.6541.

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