January 20, 2007 / 5:02 PM / 14 years ago

UPDATE 1-Garda buys Kroll unit that provides Iraq security

(Updates with comments by Kroll CEO)

TORONTO, Dec 7 (Reuters) - Garda World Security Corp. GW.TO said on Thursday it has acquired Kroll Security International, a unit that provides private security in Iraq and Afghanistan, from a subsidiary of Marsh & McLennan Companies, Inc. (MMC.N).

Kroll Security, headquartered in London, offers protection for corporate personnel in the Middle East and elsewhere, but Kroll officials said the work had recently become less profitable and more dangerous.

As part of the transaction, Kroll, the risk consulting business of Marsh, agreed to let Montreal-based Garda provide all its executive protection and kidnap and ransom services.

Garda did not provide the sale price, but said Kroll Security International had annual revenue of about $42 million. It said the combined global risk business units will operate under the name GardaWorld.

Garda has 21,000 employees and offices in Canada, the United States, Mexico and Europe.

Marsh had previously said it wanted to get out of the international security business, which Kroll Chief Executive Simon Freakley reiterated on Thursday at a Marsh investor day presentation in New York.

Kroll Security International, which has 350 employees in Iraq and 50 in Afghanistan, is largely focused on protection for corporations, Freakley said.

Freakley said revenues at the unit were good but profit margins were thin, and the work had become “more challenging.” Two of its workers were killed in Iraq in January 2005.

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