Lindsey Morden Group Inc. announced that Cunningham Lindsey U.S. Inc. has agreed to sell its third party claims administration business, consisting of RSKCo Services, Inc. (RSKCo) and Cunningham Lindsey Claims Management Inc. (CMI), to Broadspire Services Inc. (Broadspire), a Platinum Equity company.
Broadspire will service the existing claims obligations of both RSKCo and CMI in exchange for a payment by Cunningham Lindsey U.S. of U.S.$22.0 million. Broadspire will also acquire U.S.$4.0 million in net working capital of the claims administration business. Lindsey Morden expects to borrow U.S.$22.0 million from its parent company, Fairfax Financial Holdings Limited, to finance the transaction. The transaction is expected to close March 15, 2004. Cunningham Lindsey U.S.’s loss adjusting business and Vale National Training Centers Inc. are not affected by this transaction and will continue to operate under their existing trade names. These operations as well as each of the Cunningham Lindsey operations worldwide are profitable.
Lindsey Morden Group Inc. previously disclosed that a restructuring of its United States operations commenced on Feb. 2, 2004 and that restructuring costs to be incurred in the first two quarters of 2004 were estimated to be at least $8.0 million. The sale of the claims administration business is expected to improve operating performance and reduce estimated future restructuring costs of the U.S operations.
Broadspire is the former service platform of Kemper Insurance Companies in North America. Broadspire provides claims management services; disability, integrated return to work and absentee management programs; medical management services; and risk and safety consulting services to Fortune 500 enterprise customers. Platinum Equity, a global acquisition company headquartered in Los Angeles, owns Broadspire. Platinum’s current operating portfolio comprises 19 companies with aggregate revenue of U.S.$5.5 billion and more than 32,000 employees worldwide.
Lindsey Morden Group Inc. is a holding company which, through its subsidiaries, provides a wide range of independent insurance claims services, including claims adjusting, appraisal and claims and risk management services.
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