Friday, September 24, 1999

Kroll ponders selling

Stock declines; acquisitions on hold

The Cincinnati Enquirer

        Kroll-O'Gara Co., which has grown from a Fairfield-based armored vehicle manufacturer into a global provider of security products and services, is considering putting itself up for sale.

        A sale is one of a range of alternatives, including a significant new equity investment that the company said Thursday it was considering with the help of investment banker Bear, Stearns & Co.

        The company, in a news release, said it was evaluating several proposals but that there was no guarantee it would act on any. Company officials couldn't be reached for comment Thursday night. Kroll employs 200 people in Fairfield.

        Kroll's shares have slumped recently, closing Thursday at $25.811/4, down 50 cents, in the wake of reports of a power struggle between the company's principal architects: Chairman Jules B. Kroll and Vice Chairman Thomas M. O'Gara.

        Mr. O'Gara led efforts to woo Mr. Kroll, head of the international detective agency Kroll Holdings, in 1997. That culminated with the merger of Mr. Kroll's firm with O'Gara Co., a holding company that Mr. O'Gara took public a year earlier. O'Gara's Hess & Eisenhardt unit, which made horse carriages starting in 1876, produced the first armored limousine for President Truman in the late 1940s.

        Kroll-O'Gara, whose growth in the past two years has been fueled by a string of acquisitions in the security services, said Thursday that as a result of its strategic review, it was deferring acquisitions planned for the current quarter.

        As a result of those deferrals, the company said third-quarter earnings estimates could be reduced by 12 to 14 cents a share. Kroll-O'Gara was expected to earn about 36 cents a share in the quarter, according to a survey of analysts by Zack's Investment Service.

        The company said its fourth-quarter earnings could also be affected by the deferral of acquisitions, but it couldn't yet say by how much.

        Kroll-O'Gara, which employs 2,800 in more than 60 offices around the world, had net income of $13.1 million, or 69 cents a share, last year on revenues of $264.8 million.


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