Kroll-O'Gara acquires Background America

The security company increases its Internet holdings with the purchase of the personal-background information vendor.

Jan. 2, 2002 4:43 p.m. PT

Security services provider Kroll-O'Gara continued its march into the Internet-security market today, announcing its purchase of Background America, a Tennessee company that offers online personal-background information to prospective employers.

The acquisition comes on the heels of K-O's takeover of network security services startup Securify earlier this month. K-O will obtain all outstanding Background America stock in exchange for 988,000 shares of K-O common stock.

Kroll-O'Gara shares closed down $1.38 at $37.25 today. Based on that price, the transaction is worth about $36.8 million.

Jim Hurley, industry analyst at Aberdeen Group, earlier this week said the acquisition of Securify is an indication of how important the Internet has become for traditional security companies.

"We are going to see more of these kinds of examples as we go forward," Hurley said in a speech at RSA Data Security conference. "It will extend the envelope of security."

Background America provides employee screening services to more than 3,500 customers. The privately held company had sales of $5.8 million for the 10 months ended October 31, 1998, and posted a loss of $500,000. Sales were $4.2 million in 1997 and $1.8 million in 1996.