Management Consulting Group PLC, the international management consultancy group, has announced that it has entered into a conditional agreement to acquire, by way of merger, the entire issued share capital of Kurt Salmon Associates, Inc., 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 $125m (£62.7m) which will be satisfied by the payment of $75m (£37.6m) 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 €81,450,000 and $111,325,000 multicurrency debt facility which will also be used to refinancethe 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.

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.''

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.