KUHN CAPITAL Tuesday, March 20, 2018
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Clark Consulting Is Baaaack

May 27

One of the most acquisitive firms we’ve run across, Clark Consulting, recently announced its intention to resume buying again after a breather. The breather was brought on by Clark's purchase of Long Miller, a banking industry insurance broker, in 2002 for $405 million in cash and stock.

Since going public in 1998, Barrington, IL-based Clark has bought over 20 companies, all of them related in one way or another to benefits consulting and bank insurance sales. Today the company has revenues of about $300 million, 920 employees, and a trailing P/E of about 18.

Before Long Miller, Clark’s deals were conservatively structured, featuring some cash on close and large contingency earnouts. But not only was Long Miller far larger than Clark’s average deal size of about $15 million, it also heaped $300 million of debt on the company. Clark still carries $310 million in long liabilities on its balance sheet, eclipsing its marketcap of $270 million.

Clark CEO W.T. Wamberg says he’s re-entering the deal marketplace now to buy five to seven firms with sales of from $500 thousand to $200 million each. He also says he plans to use Clark’s additional debt capacity of $125 million to finance the deals, this as the company’s revenue has dropped 21% in the most recent quarter compared to last year same quarter.

Katie bar the door.

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