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Kroll sells kidnap protection company

NEW YORK (Bloomberg) — Garda World Security Corp., Canada’s biggest provider of security services, acquired Kroll Security International from Marsh & McLennan Cos. to add operations in northern Iraq and Afghanistan.Kroll Security International, which has annual revenue of $42 million, provides governments and companies with services such as intelligence, executive protection and kidnap negotiations.

Terms of the transaction won’t be disclosed, Garda World spokeswoman Nathalie de Champlain said today by telephone.

Garda World chief executive officer Stephan Cretier is relying on acquisitions to help him meet a goal of quadrupling sales to about C$1 billion ($870 million) by 2010. The London-based company is Garda World’s 11th purchase this year and the first outside North America.

The purchase from Marsh & McLennan Cos.’ Kroll Inc. unit “gives Garda an expanded platform in global security consulting services”, Nadi Tadros, a Desjardins Securities analyst, wrote in a note today.

He estimates that Garda paid about $17 million for the company, based on recent transactions in the industry.

Garda World shares rose 51 cents to C$21.11 in 2.23 p.m. Toronto Stock Exchange trading. Marsh & McLennan fell 6 cents to $31.81 in New York.

Cretier’s biggest transaction was the January purchase of SPX Corp.’s Vance International unit, based in Virginia, for $67.3 million, which gave Garda an investigation and security firm with annual sales of $155 million and about 3,700 employees.

Garda will combine Kroll Security International’s 20-person London team with Vance’s local office.

Besides Iraq and Afghanistan, the London-based company operates in the UK, Pakistan, Indonesia and the United Arab Emirates.

Kroll Security International has executive-protection contracts in Iraq and Afghanistan with oil companies and the British government as clients, Heyrick Bond Gunning, managing director of security consulting at Kroll Inc., said in a telephone interview from London. He declined to name the companies.

“Man-guarding is really the hub of the business for them,” Bond Gunning said. Outside of London, Kroll Security International has about 200 employees in Iraq and about 20 in Afghanistan, he said.

Kroll Inc. employs about 3,900 people worldwide. Marsh & McLennan bought Kroll in 2004 for about $1.93 billion.