ITHACA - An Ithaca - based consulting firm in business since 1994 has been growing a new part of its business over the past year.

Clarity Consulting, Inc. began life performing research for manufacturers in areas like competition, market segmentation, and competitive intelligence.

The firm also provided research during mergers and acquisitions.

Typically, Clarity Consulting would become involved after the parties signed a letter of intent and would prepare due-diligence studies prior to closings, says Rich Sheiman, the company's founder and president.

It was that work that eventually led the firm to begin actually facilitating mergers and acquisitions (M&A). Clarity Consulting closed its first deal in 2007.

In 2008 alone, the firm supported four deals of more than $10 million. Its target is to close another four transactions over the next 12 months.

Clarity Consulting does not disclose its annual revenue, but says that an increasing portion of its business is coming from its deal-making work. In 2007, about 20 percent of the firm's business came from mergers and acquisitions, while the remaining 80 percent resulted from its ongoing research work.

This year, the firm projects that 60 percent of the business will be related to mergers and acquisitions and 40 percent will be related to research.

"The research side is the foundation for us to pursue this deal activity," Sheiman says. "The real allure of the thing is the upside. With the M&A work, you're kind of swinging for the fences. The research is a less risky activity. So it's a nice combination."

The research work provides a steady, predictable income stream that allows the company to pursue its deal-making work, Sheiman explains. Deals can take up to two years to complete.

Clarity Consulting employs five people full time and another 20 on a contract basis.

On both research and M&A, the company still works largely in manufacturing, related services, and distribution.

One significant market is the oil and gas industry, says Steve Clapp, managing director at Clarity Consulting. The company doesn't work with producers, rather with companies that manufacture things like processing or pumping equipment.

Clarity Consulting primarily represents buyers, Sheiman adds. Those buyers can include individual companies, private investors, or private-equity groups.

In all cases, they have a specific type of acquisition in mind, detailed criteria, and are looking to use acquisitions to grow. The deals, Sheiman says, are strategic, not financial.

It's Clarity's job to find strong targets and then start a dialogue between the parties.

One of the firm's recent deals was the acquisition of Nexus, Inc. of Stamford, Conn. by Amphenol Corp. (NYSE: APH), a manufacturer of electronic and fiber-optic cables and connectors. Nexus produces audio-frequency interconnect devices.

Another deal Clarity Consulting worked on this year was the Tulsa Winch Group's acquisition of Lantec, a Canadian manufacturer of heavy-duty winches for marine and industrial applications.

Tulsa Winch is a division of Dover Corp. (NYSE: DOV), a major worldwide manufacturer and Clarity's biggest client.

Despite an increased focus on deals, Clarity Consulting will not leave behind its research work, Clapp says. In addition to providing a stable income stream, the work also helps the company build its credentials in the deal-making world.

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