19th Apr 2016 11:57
LONDON (Alliance News) - Blue-chip information services company Experian PLC on Tuesday said it has agreed a GBP360.0 million cash deal to buy Texas-headquartered identity theft protection and fraud detection provider CSIdentity Corp.
The UK-listed group has acquired CSIdentity from mid-market private equity firm Investcorp and other investors. Experian said the deal will boost its position in the affinity and direct-to-consumer credit and identity products.
Experian said the acquisition will allow it to expand beyond credit monitoring to offer a superior identity protection service.
"This two-level approach, using both credit and identity information, means we will proactively inform a consumer that their identification data has been compromised and advise that stolen identity information is actively being used in credit enquiries," Experian said.
Experian said its earnings will receive an immediate boost from the acquisition, which will be funded with bank borrowings already in place, and highlighted the "significant" opportunities for "cost synergies" over the next four years.
Experian expects to report one-off costs of USD8.0 million in the first 12 months of acquisition to integrate CSID and achieve those cost savings.
Shares in Experian were up 1.6% at 1,279.00 pence on Tuesday afternoon in London, having risen to as much as 1,283.00p, their highest level since May 2013.
In the year ended March 31, the consolidation of CSID would have added USD103 million incremental revenue and USD21 million incremental earnings before interest and tax to Experian's consolidated financial results, the company said.
Taking into account the full year revenue from recent contracted client wins, Experian said it expects the acquisition of CSID to add annualised incremental revenue of about USD120 million and EBIT of about USD30 million for the year ending March 31, 2017.
The US identity protection market is estimated to be a USD1.6 billion industry, according to Experian.
"By combining Experian and CSID capabilities, we will provide best-in-class products to give consumers greater control over their identity and credit information in one proposition. We look forward to welcoming the CSID team to Experian and building stronger and ever more compelling services which help consumers to protect, manage and make the most of their data," Experian Chief Executive Officer Brian Cassin said.
Through its technology fund, Investcorp Technology Partners III, Investcorp initially invested in CSID in December 2009 and owns a majority of the business.
"Cybersecurity is a trend that has long been on Investcorp's radar and over the last decade we have established a market leading position in the sector, investing in six IT security companies. This successful exit, and the fact that the company has attracted the interest of such a strong trade buyer, is further testament to our ability to create global leaders in the cybersecurity sector," Hazem Ben-Gacem, head of corporate investment Europe at Investcorp, said in a statement.
The acquisition is subject to regulatory approval in the US.
By Samuel Agini; [email protected]; @samuelagini
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