Credit bureau Equifax has agreed to buy the credit-services unit of Computer Sciences Corp. (CSC) for $1 billion in cash, the companies announced today.
CSC’s unit has credit files on people in 15 U.S. states and has been the largest Equifax affiliate for longer than 20 years. Its services include selling access to credit info to banks, mortgage companies, retail businesses, the auto industry, and the medical industry. With this in mind, the deal makes a lot of sense.
Equifax CEO Richard Smith said CSC’s credit-services unit should generate around $115 million in revenue a year. He said in a lengthy statement:
“We are extremely pleased to announce the signing of the agreement to acquire the CSC credit services assets. We have a long working history with CSC and believe the acquisition of these assets will be a catalyst for the long-term growth of our USCIS business unit. We anticipate that the transaction will generate incremental net operating revenue to Equifax in the range of $115 million to $125 million and EBITDA of $105 million to $110 million. The pending transaction is also expected to be solidly accretive to Equifax’s adjusted earnings per share in 2013. We will use a portion of any increased earnings for additional investments in growth initiatives and infrastructure across our businesses.”
Investors in CSC and Equifax cheered the news. Both Equifax and CSC are trading up more than 3 percent today.
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