Credit crunch probably means consoldation of the consulting sector. After Detica, who is next?

From definitely on the table through to purely speculative:Trinsum to acquire LEKAtos and Logica to mergeMCG to acquire AxonKPMG and E&Y to mergeAccenture to acquire PA

One of the Indian biggies to buy one of the large IT services companies of the type Logica, Atos, CapGKPMG to acquire PA

I'd revise my last suggestion to go with Bored's suggestion - KPMG and PA would make more sense

How about KPMG to acquire Atos, and E&Y to acquire Capgemini?

Would this be good thing?

Detica's sale price is at a 48% share premium and the shareholders are 'doing cartwheels'; this about more than the credit crunch...

E&Y to buy Capgemini? Was it not the other way around last time??!

Going by the other chain, its sounds like E&Y and PA have already merged!

LEK sale? impossible. They have loads of cash stored away and are ready to make a killing during this recession. I would expect a hiring frenzy instead.

"They have loads of cash stored away"That's either sarcasm or wilful refusal to listen to the monthly management meeting minutes. Given the choice between sale and suspension of partner dividends/cash clawback, which do you think partners will vote for? The gravy train has reached its final destination - all change please, all change.

I agree with anon - LEK is, financially, in a comfortable position. Also, their results and forcastings are looking good. Therefore, in the current climate, an acquisition of LEK is completely out of question. Perhaps in the future, who knows....

Will people only aquire a failing business? I don't know anything about LEKs situation but don't see how your statement re earnings etc prove anything.

Do you read newspapers at all? It is sort of difficult to raise capital in the current market....In these times, it is attractive to acquire weaker competitors that were not as prepared for times like these. However, to acquire a healthy competitor, requires a lot of capital as it comes both at a high premium in this type of market and during a time when debt is very expensive....THAT is why it is unlikely. Whether lek and trinsum together would be a good match...don't know, perhaps. But it is simply not the time to undertake such a transaction...

Fair comment. I do accept that it's a great environment to pick up ill prepared entities, as many PE houses have been doing. It's wrong to state this is the only kind of transactions (or attempted transactions) going on... Microsoft - Yahoo, InBev - AB, Rio Tinto - BHP... LEK is small change in terms of capital required. Again I don't know anything about LEK or potential aquirors balance sheets so can't comment much further.

true...although a number of the attempted or completed transacations you name failed exactly because there was not enough capital in the market. The ones that were succesfull, (inbev, rio tinto etc) are very big players that could largely or completely pay their acquisitions in cash or cash and shares combi, and they would have done so irrespective of market conditions as it is a long term strategic move. I really doubt whether Trinsum, being the result of a recent merger itself is in the same position nor do I think that LEK would be petty cash to them as you suggest (it is of course in comparison with the super-acquisitions you mention). Most management consultancies aim to sit tight the coming year, save cash, and if they are in the position (as is LEK), try to get marketshare from competitors in less advantageous positions (a couple of big names like Booz are in some trouble - see some other threads). But who knows....in 3 - 5 years time a lot of things can change!

sorry, the ones that failed because of the current capital market, does not include MS Yahoo of course.....the big ones I refer to are for instance blackstone's trouble with ADS..

InBev's aquisition, remember it was $52Bn, was heavily funded by debt. Of course it was. Who keeps that cash lying around?! You're at LEK you must realise the opportunity cost would be huge. Yes, there is a credit crunch. Aquistions cannot be leveraged to the extent of the LBO hay day BUT they are still being leveraged. Don't believe everything you read in the Daily Mail; credit and other economic necessities continue to exist. This can/is/will be reflected in smaller transactions also. Sorry for being argumentative, I love debating this stuff Lek-er!P.S. Rio-BHP wasn't successful... yet.

yr right...I was being lazy in my argumentation....nevertheless, InBev decided on the acquisition because they had a lot of cash lying around - making the acquisition possible in the first place. Yr absolutely right that a market that calls for consolidation will consolidate not matter the economic conditions. We should not mix up two things: 1) companies that HAVE to be acquired / be merged because of the current economic down-turn and 2) companies that WANT to merge or be acquired to gain a certain strategic advantage. The only thing I'm arguing is that option 1 is not the case for LEK or for Trinsum for that matter. Then looking at option 2, I think that currently, Trinsum being the result of a recent merger, and given the current market conditions, it is simply not a very good time for such a transaction. The push for LEK is also not there, since they are in a good position. If we return to merger / acquisition basics, there should be some cost-synergies or scale advantages to a proposed merger/acquisition of direct competitors. Cost synergies are quite low, scale advantages are there but not immensely attractive since both companies already have a global service, servicing the needs of the largest players. Leaving me to return to option 1) is there a strong need for either LEK to be acquired or for Trinsum to acquire LEK? As said before, no.

I bow to your greater knowledge of LEK / Trinsium / Other potential purchasers.