Q&A: For Altegrity CEO, Kroll aquisition is a reunion of sorts

As chief executive of Altegrity, Michael G. Cherkasky plans to spend the next few months bringing the investigations firm Kroll into the fold as the Falls Church-based security company completes its $1.13 billion acquisition of the firm from Marsh & McLennan.

It wasn't too long ago that Cherkasky would have been on the other side of the acquisition. After a 16-year career as a practicing trial attorney, which included a stint as assistant district attorney in New York County, where he oversaw investigations into corruption and organized crime that resulted in the prosecution of Mafia boss John Gotti and the World Trade Center bombers, Cherkasky joined Kroll in 1994 and quickly rose to the role of president and then chief executive. When in 2004 Kroll was bought by Marsh & McLennan, Cherkasky became CEO of the professional services firm, where he remained until 2008.

The day after Altegrity announced it would acquire Kroll, Cherkasky spoke with Capital Business about his role in the acquisition and the future direction of the company, which will have approximately 11,000 employees in offices in 30 countries. Here's some excerpts of what he had to say:

You can't seem to stay away from Kroll. What is it about the company that appeals to you?

You're right. Thomas Wolfe said you can't go home again, but I think I have. It's such a fascinating company. As a prosecutor and an investigator, putting facts together and solving problems is something you're excited to do, and Kroll was a natural way to go from the public sector to the private sector.

Given your history with Kroll, did this idea originate with you?

I'd run Kroll and then run Marsh & McLennan Cos., so I wasn't really enthusiastic about going back and running Kroll again. I love the government business and the government work at Altegrity. But Marsh & McLennan Cos. put this asset up for sale in the beginning of 2010 and Providence [Equity Partners], which is our owner, looked at it and said "this makes sense for us." They kind of dragged me along to some of the meetings, and after a couple of meetings, it was clear that there were synergies, there were things we thought we could do that were unique and that as long as the price was appropriate, it would be a very good opportunity. So my enthusiasm built.

How will this affect day-to-day operations in Virginia?

Kroll does have employees in the Washington area and about 5 percent of its revenue is government work out of Reston. We have some investigative commercial assets also out of Reston. I don't really think there's going to be a huge change. The headquarters for Altegrity will continue to be in Falls Church. Kroll, like Altegrity, has big operations in different places. Their largest operation is in Minneapolis, Minn. I think their second probably is Nashville. Then they have Denver and New York. For a multinational company, which Kroll is, it doesn't really matter where the corporate offices are. We'll still run Altegrity headquartered in Virginia. So economically, I don't think we'll be moving many jobs in or out of Virginia.

Will the two companies operate as separate units or combine operations?

Kroll will be one of the four businesses of Altegrity. So there will be Kroll [which will absorb Altegrity Risk International], USIS [the government business], Explore [Information Services], which is a Minnesota-based insurance information business, and HireRight, which is an Irvine, Calif., pre-employment business. As you would expect, Kroll's pre-employment business will migrate to HireRight, but 80 to 85 percent of Kroll will stay inside of Kroll and be operated by Ben Allen [Kroll's chief executive].

How will you merge the leadership structures of the two firms?