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Marsh & McLennan Sells Kroll For $1.1B

Marsh & McLennan sells its Kroll detective agency unit to a PE firm for $1.13 billion.
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NEW YORK (TheStreet) -- Marsh & McLennan (MMC) - Get Report has decided to turn in its fedoras, trench coats and very small cameras and, in the process, take a bath.

The big insurance broker announced Monday that it's getting out of the gumshoe business by selling its

Kroll Inc.

unit to buyout fund

Providence Equity Partners

for $1.13 billion -- almost half the sum it paid for the detective agency just six years ago.

Providence, in turn, will merge Kroll with one of its portfolio companies, another security-services outfit called

Altegrity

.

In 2004, Marsh & McLennan acquired the firm from its founder, Jules Kroll, for about $1.9 billion.

To be fair, Marsh sold off three smaller businesses under the Kroll umbrella during those six years of ownership, netting about $200 million. It also took a pair of charges totaling $855 million to pay for goodwill writedowns of Kroll.

Altegrity and Kroll have a history: Altegrity CEO Mike Cherkasky served in the same capacity at Kroll from 2001 until Jules Kroll and Marsh made their deal.

Kroll is perhaps best known as one of the

world's premier purveyors of corporate espionage

TST Recommends

, forensic accounting and crisis management services to Wall Street firms and multinational companies.

Goldman Sachs

(GS) - Get Report

, a longtime Kroll client, will provide some of the debt financing for Providence's acquisition, as will

Apollo Management

.

In the press release announcing the deal, Marsh CEO Brian Duperreault essentially admitted defeat, if translated from the corporate-ese: "Over the past six years, Kroll has been a valued member of the MMC family, however we have determined our long-term strategy is to focus on the Risk and Insurance Services and Consulting businesses."

Marsh & McLennan shares were trading Monday morning at $20.93, down 6 cents, or 0.3%, on tepid volume.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.