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Charles River Runs Deeper

November 15

Cambridge, MA-based Charles River Associates (Nasdaq: CRAI) has deepened its energy industry consulting expertise by acquiring for about $6 million a neighbor, Tabors Caramanis, a boutique consultancy focusing on price forecasting, planning and project management mostly for the electric transmission and distribution (T&D) industry.

An active and judicious buyer, CRA has now made eight acquisitions since 1998: for those deals whose value was revealed, CRA has spent about $135 million.

Like Tabors, these prior purchases were also of consultancies: Tilden Group, economic consultants to the construction industry; Rausser Consulting, litigation support for the investment community; the Energy Economics Practice of PA Consulting; the Chemical and Energy Practice of bankrupted Arthur D. Little; Network Economics Consulting Group, an Australian economic and regulatory consultancy; and InteCap, IP management, valuation and litigation support consultant, at $84 million, CRAs largest deal to date.

Tabors Caramanis employs 15 consultants, making the CRA offer -- $4.7 million in cash and $1 million in restricted stock with an additional but unspecified earn-out kicker -- worth about $400 thousand per billable head.

As we have reported in earlier blurbs and white papers, 2004 marks a sort of revival in M&A activity among IT and management consultancies, particularly those serving the energy industry. For an e-mailed copy of our analysis of this trend, contact energy@kuhncap.com.

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