4 April 2024 – Experian, the global information services company, is pleased to announce that it has signed an agreement to acquire illion, one of the leading consumer and commercial credit bureaus in Australia and New Zealand.
Brian Cassin, Chief Executive Officer said: “We are delighted to announce that Experian has entered into an agreement to acquire illion, a highly complementary business to Experian in Australia and New Zealand (A/NZ), which will enhance the competitive dynamics in this important market. This marks a pivotal step in our longstanding commitment to the region and reinforces our dedication to delivering exceptional value and more choice to clients in A/NZ.”
Overview and Strategic Rationale
Established in 1986 in Australia, illion is a bureau provider of consumer credit reporting, commercial credit reporting, and identity and verification solutions in Australia and New Zealand.
Our strategy in EMEA and Asia Pacific is to focus on markets where we have a clear opportunity to operate at scale and deliver innovation-led growth. Experian has successfully operated in A/NZ for over 30 years, serving lending and other institutions with decisioning software, open data and data quality services, as well as consumer bureau services. Australia is currently Experian’s fifth largest country of operation by revenue.
The Australian lending market, like many of our developed markets, is on a journey to help widen access to credit, lower lending costs and improve digital banking services for consumers and businesses. A series of regulatory reforms in Australia have introduced comprehensive (positive) data and open data services and have widened the array of data assets, scores and analytical insights being adopted by banks and other institutions. This has enhanced appetite for analytical tools and data-driven services, expanding our addressable market opportunity.
The acquisition of illion will enable Experian to make full use of this opportunity and offer enhanced choice in A/NZ by providing a meaningful competitive alternative to help businesses accelerate the adoption of digital services. It is highly complementary and synergistic to Experian A/NZ, the combination of which would present a more complete service for clients, adding depth in consumer bureau services, an attractive position in commercial credit bureau services as well as capabilities in identity management solutions. This compares to Experian’s strengths in analytical product capability, decisioning software and certain open banking solutions.
More businesses in A/NZ will benefit from Experian’s leading global platforms to speed up the process of credit granting, enhance digital experiences for users, reduce fraudulent exposure and improve efficiency in banking and other sectors. Experian will be well positioned to introduce more innovation in Australia through capabilities such as the Experian Ascend unified platform, which encompasses Experian’s sophisticated analytics, and our PowerCurve decisioning suite.
Financial information
The acquisition of 100% of illion is for a total consideration of up to A$820m (c.US$532m*), payable on completion of the transaction and to be funded from Experian’s existing cash resources. The acquisition is subject to regulatory review by the competition authority in Australia which we anticipate will conclude in the second half of calendar year 2024. In the first full year of ownership we expect the acquisition to add revenues of c. A$175m and Benchmark EBITDA of c. A$65m. This compares to Experian revenues in A/NZ which are expected to be c. A$115m in FY24.
* AUS$/US$ spot exchange rate of 1.54 as at 3 April 2024
Source: Experian Press Release
Background:
Experian Australia Credit Services is seeking to acquire illion. The latter is a former Dun & Bradstreet unit which was acuired the private equity investor Archer Capital some time ago.
The context:
The acquisition is currently under consideration by the ACCC, which is accepting submissions until 19 April.
Experian Australia is the majority shareholder of Experian Bureau, while ANZ, Commonwealth Bank, NAB, Westpac, Latitude and American Express all hold minority interests.
Value of information: Illion is majority owned by funds managed by private equity investor Archer Capital. It acquired illion from Dun and Bradstreet in 2015 for A$220million. In 2019 Archer Capital was seeking to sell illion for A$1.5bn vs the current offer from Experian of A$820million.
Both Experian and Illion provide consumer credit reporting services in Australia to lenders, utilities, telecommunication providers and loan providers. The companies also supply related services, including software for managing customer originations, marketing services, categorisation solutions and identity verification services.
