Crawford & Company Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Crawford & Company on June 15, 2018. The filing reports the completion of a material asset disposition and a related amendment to the company's credit agreement.
Key Financial Metrics and Transaction Details
- Transaction Type: Sale of the Garden City Group (GCG) business.
- Buyers: EPIQ Class Action & Claims Solutions, Inc. and EPIQ Systems Canada ULC.
- Purchase Price: $42,021,655.05, subject to working capital adjustments.
- Escrow: $185,000 held for indemnification claims.
- Financial Statements: Unaudited pro forma condensed consolidated financial information is provided in Exhibit 99.1 for the three months ended March 31, 2018, and the year ended December 31, 2017. Specific revenue, profit, or cash flow figures for the period are not detailed in the text of this filing.
Material Changes and Agreements
- Asset Disposition: The Company sold all membership interests of Garden City Group, LLC and specified assets/liabilities of Crawford Canada related to the GCG Business.
- Liability Retention: Crawford Canada retained certain liabilities related to the GCG Business.
- Credit Agreement Amendment: The Company entered into a Limited Consent and First Amendment to its Amended and Restated Credit Agreement with Wells Fargo Bank and other lenders to consent to the GCG sale.
- Restrictive Covenants: The Company is prohibited from engaging in competing businesses in the U.S. or Canada and from soliciting GCG employees for four years post-closing.
- Transition Services: The Company will provide IT and back-office transition services to the Buyers through December 31, 2018.
Outlook, Risks, and Contingencies
The filing includes a cautionary note regarding forward-looking statements, noting that actual results may differ due to risks referenced in the Company's 2017 Annual Report on Form 10-K. The transaction is subject to post-closing indemnification provisions and working capital adjustments. The Company undertakes no obligation to update forward-looking statements.
Key Facts for Investor Verification
- Verify the final purchase price after working capital adjustments are calculated.
- Review Exhibit 99.1 for the impact of the GCG sale on pro forma revenue and earnings.
- Confirm the specific liabilities retained by Crawford Canada and their potential financial impact.
- Assess the duration and scope of the transition services agreement ending December 31, 2018.
- Examine the four-year non-compete and non-solicitation restrictions for potential operational limitations.