Experian announced it has signed a definitive agreement to acquire 41st Parameter, the market leader in device identification technology for web fraud detection. 41st Parameter’s industry-leading solutions have been adopted by the world’s leading financial institutions, eCommerce merchants and online travel businesses. 41st Parameter’s patented device identification technology strengthens Experian’s global web fraud detection and identity authentication capabilities.
Experian’s fraud prevention operations already generate about 6-7 per cent, or $300m, of its overall revenue. The company said a proliferation of mobile devices and the growth in ecommerce would fuel an increasing demand for products and services that prevent web fraud.
41st Parameter’s clients range from banks and travel companies to payment service providers, and Ms Smith said Experian would be able to sell the technology to its clients worldwide. Experian said it was expecting 41st Parameter to generate about $26m of revenue for the year ending December 31 2013. This makes it a very expensive acquisition with a 12.5x revenue multiple! They added that the acquisition was expected to be neutral in terms of earnings per share in the year ending 31 March 2014.
41st Parameter’s investors include Norwest Venture Partners, a venture capital firm that has invested in ecommerce start-ups, and Jafco Ventures, a California-based firm that invests in communications and software companies.
Source: Experian Press Release & Financial Times