Acquisition will significantly improve Experian’s market position in the affinity and direct-to-consumer marketplaces, combining best-in-class credit and identity products.
Experian announced that it has signed a definitive agreement to acquire CSIdentity Corporation (“CSID”), a leading provider of consumer identity management and fraud detection services. The transaction is subject to Hart-Scott-Rodino regulatory approval in the US and other customary closing conditions. The purchase price is US$360m, payable in full at closing, which will be funded from Experian’s existing committed bank facilities.
The identity protection market: Identity theft is a significant and growing concern, with the risk becoming more prevalent as companies store information on consumers digitally and as people share personal information online. Consumers have a heightened desire to protect themselves and are increasingly seeking out personalised solutions to protect their identity. Organisations which have been the victims of criminal activity often have an obligation to assist consumers who may have been affected by a data breach. As such, consumer adoption of identity-related services is increasing, with the US identity protection market estimated to be a US$1.6 billion industry, with opportunities for continued strong growth.
CSID overview and business model: Founded in 2006, CSID established itself as the wholesale technology and services provider to the identity protection industry. It has developed a diverse revenue base, delivering significant growth in clients and revenues to become a major provider of identity services in the US. Its platform currently supports approximately 10 million end consumers across multiple client relationships.
CSID uses its patent-protected technology to access a variety of data and scours the internet in real-time to monitor websites, blogs, bulletin boards and chat rooms to identify the illegal trading and selling of personal information. It provides a range of services, including credit data, to notify consumers of potential abuse of their identities and that their digital identity information is being actively sold or traded on the internet. This helps consumers to take action to protect themselves.
CSID’s clients include information services companies, retailers, financial institutions, insurance companies and other institutions with large customer or membership bases. It provides services in a variety of ways: it is the platform that sits behind many other identity solution providers; it provides white-label wholesale identity theft protection to customers who then market identity protection under their own brand; and it provides services to organisations which have been a victim of a data breach. Its revenue model is typically a per-member-per-month fee or a revenue share agreement.