NEW YORK—Analysts reacted positively to a report last week that Marsh & McLennan Cos. Inc. has put its risk consulting and technology unit Kroll Inc. up for sale for about $1.3 billion.

Quoting sources familiar with the situation, the Financial Times said several private equity firms have responded with bids, including the Carlyle Group, Apax Partners and General Atlantic L.L.C..

Spokespeople for MMC, Carlyle Group, Apax Partners and General Atlantic declined comment.

MMC paid about $1.9 billion to acquire Kroll in July 2004, just a few months before then-New York Attorney General Eliot Spitzer filed fraud and bid-rigging charges against the company. Jeffrey W. Greenberg, who spearheaded the acquisition, stepped down as MMC's CEO shortly thereafter and was replaced by Kroll CEO Michael G. Cherkasky.

While the plan had been to integrate Kroll with other MMC operations, that never occurred and some units began underperforming financially. That prompted several shareholders to clamor for MMC to divest the unit, arguing that Kroll was not a strategic fit.

Upon replacing Mr. Cherkasky in January 2008, Brian Duperreault said before he could make any decisions about Kroll's synergies with MMC, Kroll needed to be better run and operated.

He made fixing Kroll one of his first priorities and quickly installed new leadership, reorganized its operations and sold off various parts (see timeline, page 6).

Kroll, however, has continued to be a drag on MMC's financials.

In 2008, $540 million in impairment charges to reflect Kroll's reduced value on MMC's balance sheet as a result of a restructuring gave way to a $73 million 2008 loss for MMC.

MMC took another $315 million impairment charge in the second quarter of 2009 in connection with the sale of Kroll Government Services, the unit's U.S. government security clearance screening business. That charge resulted in a $193 million loss for MMC in the quarter.

Although MMC reported a $242 million profit in 2009, Kroll was the worst-performing operation within MMC in top-line growth. Excluding Kroll's corporate advisory and restructuring unit, which was bought out by management in 2008, Kroll's revenues fell 16% to $667 million.

Meyer Shields, an analyst with Stifel, Nicolaus & Co. Inc. in Baltimore, said he sees the potential divestiture as positive.

“Kroll's business focus has always seemed somewhat out of synch with MMC's spectrum of better-integrated insurance and consulting segments, and last year's weak results suggest limited cross-selling successes,” Mr. Shields wrote in a client note.

“Most investors have likely long expected that Kroll would be sold, and we think MMC would be far better off deploying its net proceeds into expanding its small-commercial account insurance (agency) rather than trying to grow or integrate the mostly peripheral Kroll,” Mr. Shields said in referring to Marsh & McLennan Agency L.L.C.

“I never thought strategically it was a great fit,” said Cliff Gallant, an analyst with Keefe, Bruyette & Woods Inc. in New York. “If it's noncore, it's somewhat distracting, so I think it probably would be strategically better if it were gone.”

Bret Howlett, an insurance analyst for Standard & Poor's Corp.'s equity research group, agreed.

“Kroll accounted for about 6% of MMC's operating revenues in "09, but it was the company's worst-performing segment with respect to top-line results. We expect Kroll to be a drag on revenue growth for MMC this year considering its economically sensitive businesses, and would view positively its sale,” Mr. Howlett said in a research note.