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NEWSWIRE
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Parts of Kroll could have outside value |
By Rhianna Daniels - 05.13.2008
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NEW YORK--Marsh & McLennan is currently weighing the option of selling underperforming parts of its Kroll unit after a $425-million dollar "asset impairment" charge was assessed in the first quarter, but has plans to align Kroll's stronger core businesses within MMC.
Marsh purchased Kroll in 2004 for $1.9 billion, but as a whole it has struggled to find profitability within the organization. During an earnings conference call last week MMC CEO Brian Duperreault reaffirmed his original February assessment that "while some companies within MMC were doing well, the company as a whole was not performing at acceptable levels."
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"When we acquired Kroll in July 2004, we planned to combine it with other MMC operations and realize meaningful synergies but that integration was never completed," he said. "Kroll is a very complicated company. In February, I began to peel back the layers of Kroll and concluded that there are several lines of business that fit into the long term MMC portfolio and some that do not."
Kroll's background screening, litigation support and business intelligence and investigations operations are businesses that fit into the MMC portfolio, Duperreault said as they are "core Kroll and in these Kroll is a world leader."
In March, Ben Allen was named CEO of Kroll and Duperreault noted he is charged with identifying the growth potential of these core businesses and how they align with MMC.
Parts of Kroll that provide services to mortgage lenders and other government businesses "may have greater value outside" MMC, Duperreault said. Those are the businesses that drive the impairment charge, Bloomberg reported.
Earlier this year, private equity firm BC Partners expressed interest in purchasing Kroll, the news service said, but that offer was rebuffed.
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