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Business services provider Mouchel Group plc has more than doubled the size of its management consultancy division after completing an acquisition worth tens of millions of pounds.

The group has bought Hedra, which provides its services to the public sector, for £50 million. The consideration was paid in cash and shares, with funding provided through debt arranged by Royal Bank of Scotland and Lloyds TBS.

Pre-completion Mouchel’s management consultancy business employed some 250 staff and 80 associates, with revenues of more than £30 million. Following the deal, it employs almost 500 permanent staff with support from an equal number of associates. Its revenues are expected to hit £100 million in the year to July 2008.

This is the group’s largest transaction since the merger of Mouchel and Parkman in 2003 and is part of its strategy of diversifying away from an engineering-focused operation to a multi-disciplinary consulting and business services group. This latest deal provides Mouchel with access to the central government and health sectors.

This is the second addition to its management consultancy operations following its acquisition of Hornagold and Hills in November 2006.

Hedra’s chairman Lynton Barker said: “Our plan has always been to merge Hedra with a larger company once we reached critical mass.” The company’s chief executive, Mark Campbell, joins Mouchel’s management consultancy as managing director.

Hedra has been helping government departments and local authorities establish policy and strategy initiatives since 1990. It has offices in London, Edinburgh and Hampshire with 210 employees and more than 400 active associates throughout the UK. In the year to January 2008, Hedra generated pre-tax profits of £4 million from a £47.5 million turnover.

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