The Toronto-based–Lindsey Morden Group Inc. (LMG) announced that its wholly-owned subsidiary, Cunningham Lindsey U.S., Inc., has entered into a definitive agreement to acquire RSKCo Services, Inc. from Continental Casualty Company, a subsidiary of CNA Financial Corporation.
“Through the transaction, Cunningham Lindsey U.S. will acquire the claims management and related business of RSKCo Services that is not sold with insurance products offered by CNA subsidiaries,” said the announcement. “The billed revenue from active customers of this business for the 12 months ended February 28, 2003 was approximately $39 million (all amounts in U.S. dollars). Completion of the transaction is subject to standard closing conditions and is expected to occur by early June 2003.
“The purchase price will equal 35% of revenue billed during the year after the closing to active customers of RSKCo that remain active customers one year after closing, and will be payable 14 months after closing. To offset the cost of certain of RSKCo’s existing claims administration obligations, the seller will be responsible for providing approximately $29 million, of which approximately $17 million will be provided as cash and cash equivalents in RSKCo at closing and the remaining $12 million will be credited against the purchase price.”
LMG noted RSKCo’s “innovative, customized claims and case management operations” and said it plans to integrate them into its “Cunningham Lindsey U.S.’ third party administration business.” It further indicated that “The new combined claims management organization will operate under the RSKCo brand. Cunningham Lindsey’s loss adjusting business and Vale National Training Centers Inc., specializing in loss adjuster training, will continue to operate under their existing trade names.”
“RSKCo’s quality and brand are well known in the industry. This combination will allow us to expand our integrated service platform, combining the robust claims and case management, loss adjusting services and adjuster training offerings, while raising the level of service delivered to both RSKCo and Cunningham Lindsey clients,” stated Cunningham Lindsey Chairman and CEO Stephen A. Eisenmann. “We are delighted to welcome RSKCo management and staff to our team and are very excited about the potential of this new, expanded organization. Our goal is for all of our customers to experience a reinvigorated service model which focuses on reducing client losses, building stronger client partnerships, responding with a sense of urgency to client needs and requests, and delivering customized service solutions.”
“Both RSKCo and Cunningham Lindsey U.S. customers greatly benefit through this combination,” explained Robert R. Kulbick, who headed RSKCo and will continue to provide leadership in an expanded role at the corporate level of Cunningham Lindsey U.S. “The high quality service and valued relationships RSKCo clients have long enjoyed will not change. I look forward to this challenging opportunity and am extremely pleased to be a part of this new venture.”
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