By Peter Key
Philadelphia Business Journal
The Keane Organization, the nation’s largest provider of unclaimed property services, has had two divisions bought by a company that was the second-largest provider of those services.
Wayne, Pa.-based Keane’s other two divisions were spun out into a new company run by the Keane Organization’s owner and two of its other executives.
Both transactions were announced Wednesday.
New York-based Venio LLC said it bought the Keane’s Unclaimed Property Services division and Investor Communication and Retention Solutions division, combined them with its operations and changed its name to Keane.
Venio’s CEO, Michael O’Donnell, retains that role with Keane, which is keeping its headquarters in New York and the divisions that used to belong to the Keane in Wayne, where they employ about 130. Keane now employs 160 overall.
The Retirement Services and Business Risk Management Solutions divisions of Keane were spun into Risk Compliance Solutions LLC, which announced the deal. Steven Grossman, who owned Keane, is Risk Compliance Solutions’ chairman, Dorothy Flynn is its CEO and Caroline Castagno is its chief operations officer. Terms of the spin-off weren’t disclosed.
DFW Capital Partners, a Teaneck, N.J., private-investment firm, formed Venio two years ago when it bought a majority stake in some companies in the unclaimed property business.
Venio’s acquisition of the two divisions from Keane was part of a deal that also involved purchasing the minority stake of the companies bought by DFW to form Venio and paying off debt related to that acquisition. DFW contributed an undisclosed amount of money to the deal.
Chicago-based Maranon Capital LP said it provided a $40 million senior debt facility and $23 million in mezzanine debt and equity co-investment.
Keane helps institutions such as brokerage firms and banks locate investors and account holders with whom they have lost touch. Although only a small percentage of those people turn out to be deceased, O’Donnell, Keane’s CEO, said that percentage provides the company with some of its revenue. When it locates the heirs of a dead person with unclaimed assets, it charges them for helping them gain title to the assets.
Keane also helps institutions comply with regulations regarding unclaimed assets, which usually must be turned over to states if they go unclaimed for a specified period of time.
“In a lot of cases, what we’re trying to do is help institutions before [the assets] end up just going to the state … but there’s also a compliance aspect,” O’Donnell said.
“We use our database capabilities and research capabilities to help them comply with [Securities and Exchange Commission] regulations, comply with state laws and keep customers and assets and shareholders and all that in the fold.”
The unclaimed-asset industry is small enough that the newly constituted Keane is the largest player in it, by far.
O’Donnell said Keane’s first order of business will be to integrate Venio and the divisions of Keane.
After that, he said, “we will continue to grow our product offerings so that in the world of unclaimed property and compliance we can continue to offer more and more to what is a very satisfied customer base at this point.”
www.bizjournals.com/philadelphia/news/2010/12/16/keane-organization-divisions-sold-to.html