[May 18 - 5:23 p.m.]
Kroll to be acquired for $1.9 billion

Email | Print By Paige Orr

05-18-2004 5:23 PM — Marsh & McLennan Companies (MMC) late today announced plans to acquire Kroll Inc. (KROL), a risk mitigation services company.

Kroll’s Background America division is located here and is headed by Mike Shmerling, who is also executive vice president of the parent corporation. Based on his ownership of 523,282 Kroll shares, Shmerling’s proceeds should be $19.4 million.

Under the companies’ agreement, MMC will acquire Kroll in an all-cash $1.9 billion transaction, in which Kroll shareholders will receive $37 for each outstanding share of Kroll common stock they own. The price to be paid by MMC represents a 31.7% premium over Kroll’s closing stock price of $28.10 today.

At market close, shares of Kroll were up 16 cents to $28.10. Shares of MMC were up 15 cents to $42.74.

Completion of the transaction is expected to occur in the third quarter of 2004.

Upon completion of the transaction, Kroll will become part of Marsh Inc., MMC’s risk and insurance services subsidiary. Marsh Risk Consulting and Kroll will be combined under the leadership of Michael Cherkasky, Kroll president and chief executive officer. Jules Kroll, founder and executive chairman of Kroll, will be named a vice chairman of Marsh Inc.

Shmerling founded Background America in 1995 and sold it to Kroll in 1999.

MMC’s financial advisor for the transaction was Greenhill & Co. Kroll’s financial advisors for the transaction were Goldman Sachs & Co. and Morgan Joseph & Co., which has a Nashville office.