Kroll CEO Sees Acquisitions as Group Grows
Risk consulting group Kroll, a subsidiary of Marsh & McLennan , plans to strike deals including transformational acquisitions as it boosts its business in growth areas like fighting identity theft, its chief executive said on Wednesday.
Over the past months, Kroll has slimmed down or sold legacy units including Kroll Security International, a division providing private security in Iraq and Afghanistan, to focus on higher growth -- and higher margin -- areas like providing advice on homeland security in the United States.
It bought Homeland Solutions, which develops and deploys counter-terrorism information-sharing networks, last July.
"Kroll is a growth engine and acquisitions are absolutely our plan," Chief Executive Simon Freakley said in an interview on the sidelines of the World Economic Forum in Switzerland.
"There will be acquisitions that build on our existing competencies, acquisitions that take our competencies into new geographies, when buying a player there already would give us a
first mover advantage," he said.
"And there will absolutely be a smaller number of larger, transformational deals that will continue to evolve what Kroll does and how it does it."
He gave no timing on the possible deals.
Kroll's parent Marsh & McLennan plans to sell its Putnam Investment asset management unit and has said it plans to spend cash from the sale on acquisitions to strengthen Kroll and
Mercer, its consulting arm.
The sale of Putnam, expected by the end of January, could reap up to $3.9 billion for Marsh, according to media reports.
Freakley said growth areas for Kroll, where he took over as chief executive in 2004, included data mining systems and associated projects helping clients to find key information.
"Twenty years ago, the critical skill was knowing where to find something. Now there is a blizzard of information and it's all about how to find the snowflake you're after," he said.
Freakley said Kroll would also seek to boost its work on fighting identity fraud.
"Identity theft is the fastest growing white collar crime," he told Reuters. "I think that it is currently significantly underestimated as a threat -- for corporations, in dealing with the fallout of a major breach and the loss of customer confidence, and for the individual, who has to then spend 60 to 100 hours of their own times reconstituting his identity."
"I would say identity theft will be a red hot issue in 2007," he added.
Freakley also confirmed the group was not for sale, dismissing media reports that Jules Kroll, founder of the eponymous corporate investigation firm, was considering buying it back from Marsh & McLennan.