The ranks of credit bureaus in Australia and New Zealand will narrow to three, with Experian entering into an agreement to buy illion – a high margin business.
The purchase price is “up to A$820 million”, and a revenue multiple of 4.7 times.
illion, formerly Dun & Bradstreet Australia, has been a fixture of the credit reporting scene since 1986.
Experian Australia Credit Services Pty Ltd (also, Experian Bureau) is the buyer of record.
Experian Bureau is a joint venture, with Experian Australia Pty Ltd holding a majority share, and the four major banks (ANZ, CBA, NAB and Westpac), Latitude Financial Services Australia Pty Ltd and American Express Australia Limited, each holding minority interests.
illion is majority owned by funds that are managed and advised by Archer Capital.
Experian and illion each provide consumer credit reporting services in Australia. Their customers are credit providers such as lenders, utilities and telecommunication providers.
Experian and illion both also supply related services, including software for managing customer originations, marketing services, categorisation solutions and identity verification services, according to an outline of the deal published by the Australian Competition and Consumer Commission.
This merger leaves Equifax and CreditorWatch as the remaining competitors in the field of credit reporting.
The Experian Bureau offer for illion is subject to an informal merger review by the ACCC.
The participation of the four major banks in the Experian Bureau joint venture may raise red flags with the ACCC, with, presumably, the majors now likely to favour Experian Bureau over rivals for the supply of credit reporting services.
Experian said that in the first full year of ownership “we expect the acquisition to add revenues of c. A$175 million and benchmark EBITDA of c. A$65 million.
“This compares to Experian revenues in A/NZ which are expected to be c. A$115 million in FY2024.”
The ACCC plans to reach a decision by June 27.