In what will probably be told as the final chapter of one of the saddest professional services stories in management consulting history, a tale that traces rapid growth and equally rapid decline, Archstone Consulting, a strategy and operations firm, has agreed to be acquired by The Hackett Group. While Hackett has done a good job spinning the deal (see below), it would seem that despite the PR air cover, they’re buying a distressed asset on a value basis. Moreover, Archstone’s original investors, Chicago-based Lake Capital, appear to have lost between 74% and 82% (based on Tuesday’s market close) of their original investment of $75 million in Candlewood Consulting, which became Archstone following their original capital infusion/commitment in 2003. Before digging into some of the details of the deal and what it means, let’s first dispose with the spin and numbers.
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