Verisk announced Tuesday that it has entered into a definitive agreement to sell Verisk Financial Services, its financial services business unit, to TransUnion for $515 million in cash consideration paid at closing.
Verisk Financial maintains the largest financial institution consortia to provide proprietary competitive portfolio performance insights, benchmarking, decisioning algorithms and business intelligence. It also offers customized analytic services to leading financial institutions, payments providers, alternative lenders, regulators and retailers worldwide.
With teams across eight countries, Verisk Financial serves the largest companies in the payment ecosystem and provides competitive studies, predictive analytics, models and advisory services. Verisk Financial also addresses merchant fraud, regulatory compliance and consumer bankruptcy for financial institutions around the world.
Verisk Financial’s leading business, Argus Information & Advisory Services, is a longstanding strategic partner of TransUnion.
TransUnion CEO Chris Cartwright said the deal makes sense in a lot of ways.
“Verisk Financial is a distinctive business with authoritative, proprietary data — particularly from Argus’ consortium of lender-contributed data and analytics,” he said. “TransUnion’s broad range of data, analytics and technology enhances Verisk Financial’s existing data set and expands their addressable market while delivering valuable innovation to members of the consortium.”
In 2021, on a reported basis, Verisk Financial generated $143 million in revenue and $23 million in adjusted earnings before interest, taxes, depreciation and amortization. At the business unit level, Verisk Financial generated $41 million in adjusted EBITDA before corporate allocations and one-time discrete costs.
The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second quarter of 2022. Goldman Sachs & Co. LLC is acting as financial adviser and Davis Polk & Wardwell as legal adviser to Verisk in connection with the transaction.
Verisk, a leading global data analytics provider and a Fortune 500 company based in Jersey City, said it intends to return the after-tax proceeds to shareholders through share repurchases.
Verisk Chairman and CEO Scott Stephenson said the sale of Verisk Financial follows Verisk’s recently announced agreement to sell its 3E business and marks the next step in the company’s ongoing portfolio shaping strategy to sharpen the focus on its core businesses and drive enhanced value creation.
“Last year, we began a comprehensive portfolio review to identify the most value-creating opportunities available to Verisk and best position our company for continued sustainable growth,” he said. “With the sale of Verisk Financial to TransUnion, we are sharpening our focus on our core growth engines, while unlocking value for our shareholders.
“Beyond the benefits to our shareholders, this transaction will ensure the Verisk Financial team can continue to execute on their long-term strategy and commitment to providing unique and enabling solutions to the financial services industry.”
Verisk Chief Financial Officer and Group President Lee Shavel, who will succeed Stephenson as CEO later this year, said Verisk Financial has served the company well.
“Verisk Financial has continuously strengthened its offerings, deepened its relationships with clients and broadened the client objectives it supports,” he said. “Over the past four years, the Verisk Financial group has made significant strategic and operational shifts that will benefit the business and its clients in the long run.”