Liu Capital
Long/short equity, special situations, long-term horizon

The Long Case For Crawford & Company

Elevator Pitch

Crawford & Company (NYSE:CRD.A) (NYSE:CRD.B) is the largest independent claims management provider for the insurance industry. The company serves clients globally in over 70 countries.

Crawford is currently significantly undervalued relative to comparable firms and private market valuation. The company currently trades at 5.0x 2013 EBITDA and 9.0x FCF. By comparison, Sedgwick CMS was recently acquired by KKR at 12.0x EBITDA. The company's dual-share structure, below-average operating results, large pension obligations, contract run-offs and a lack of coverage may be contributing to a mispricing of its Class A shares. Going forward, several key drivers may help drive valuations, including operational improvements, a de-risked pension plan and a potential collapse or revaluation of its dual-class...

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