Case Study

The Client

A diversified Holding Company with three operating companies each having revenues of over $300M. The holdings were: a 65 plus office Midwest staffing company with many Fortune 500 clients, a building management and janitorial (and other services) company primarily with Fortune 500 clients and a security guard firm servicing Fortune 100 companies.

The Challenge

The Holding Company was having difficulty selling the group of businesses separately or together primarily as a result of risk management and workers’ compensation historical issues. In addition, the internal controls, underwriting and key analytics of the companies were viewed by potential buyers as a concern (due diligence provision concern).

The Solutions

Staffing Company Turnaround

• The risk management, workers’ compensation and underwriting departments, procedures and practices were re-engineered
• The claim history and associated collateral burdens were worked down substantially in a one-year period
• The incident rate of new claims was reduced by 40% by implementing effective loss control practices and revised safety programs, client culling and placement of internal safety professionals
• A robust internal due diligence audit and preparation process was implemented in order to prepare for potential buyer review

Building Maintenance/Janitorial Turnaround

• The risk management, workers’ compensation and underwriting departments, procedures and practices were re-engineered
• A very robust underwriting and contract management program was put in place to expedite and successfully navigate sophisticated contract negotiation as well as numerous vendor management system processes associated with Fortune 500 clients
• The incident rate was reduced by 60% in one year by re-engineering the safety management programs, internal training and the installation of best practices
• The collateral burden was reduced by 30% in one year through specific claims management projects and the training of internal claims departmental managers
• The EPLI concerns of potential buyers were addressed through the re-engineering of the human resources department and the installation of analytical tools, management programs, management training initiatives and HCM best practices

Security Firm Turnaround

• The incident rate was reduced by 60% in the first two years

• The hiring and certification processes were re-engineered and improved to source as well as place the best candidates resulting in increased service levels while reducing claims
• Underwriting and contract management best practices were implemented
• Vital documented policies were created, implemented and designed for the rigorous review of potential buyers during the due diligence process

The Results

• A $6M reduction in collateral requirement was achieved in less than two years

• The total incurred annual rate was reduced resulting in a $1.2M same year savings
• The aggregate incident rate across the operating units was reduced by over 50%
• The staffing company was sold in record time for the due diligence process (two weeks) to a major national staffing firm
• The building maintenance/janitorial and security firms were sold to the largest national firm in the industry with a due diligence process of less than one month