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After seven years of being a public company, Trover Solutions Inc. is a private firm once again.
Following a $60 million sale to Tailwind Capital Partners LLC, a New York City-based private equity firm, Trover is poised for growth under its new status.
The cash will give Trover officials the opportunity to explore potential acquisitions and develop new products, said Patrick B. McGinnis, CEO and one of the company's founders.
Trover Solutions is hired by property and casualty and health insurers to investigate accident claims to determine if another party is responsible for paying the claims. When warranted, Trover
recovers money for its clients from liable parties.
The majority of the company's accounts are for health insurers, although company officials are trying to increase the percentage of property and casualty business.
"This is a major event in the history of our company," said McGinnis, who has watched the 16-year-old company go from being privately held to publicly traded and back to private status when the deal closed last week.
The company had traded on the Nasdaq market with the stock symbol TROV. During the past year, it traded between a low of $5.53 on July 23, 2003, and a high of $7.43 on Oct. 17, 2003. The stock closed at $6.96 on July 16, the last day of trading.
Trover Solutions has 530 employees and leases 75,000 square feet of office space in Watterson Tower on Bishop Lane.
Sale makes company private again
The sale follows more than a year of study and discussion of potential options that began as talks about forming an employee stock ownership plan (ESOP), McGinnis said. A special committee of the board was formed last August to study options and ultimately decided the company's fate.
Initially, McGinnis said, he favored the ESOP, which would have paid shareholders $7.05 per share, because "it would enable the employees of the company to own the business for the long term and to benefit very directly from the results of our efforts to grow the company and make it more profitable." But as the ESOP was investigated further, management officials learned that "it was a hard credit market," McGinnis said. "When all the dust settled, it turned out that we simply couldn't raise...