TransUnion Announces Agreement to Sell G2, LCI and Fintellix to Stellex Capital Management for $176 million

Rhea-AI Summary

TransUnion (NYSE: TRU) has signed a definitive agreement to divest G2 Web Services, Lundquist Consulting, and Fintellix to Stellex Capital Management for $176 million. The deal includes $104 million in cash and a $72 million note, expected to close by year-end, pending regulatory approval. The net proceeds will be used to pre-pay debt. This divestiture enhances the value of the company’s previous acquisition of Verisk Financial Services, which was purchased for $515 million. Argus Information is performing well with 4% revenue growth in Q2 and Q3 2022.

Positive

• Divestiture of G2, LCI, and Fintellix for $176 million enhances financial position.
• Net proceeds will be allocated for debt pre-payment.
• Argus Information shows 4% revenue growth in the last two quarters.

Negative

• None.

CHICAGO, Dec. 13, 2022 (GLOBE NEWSWIRE) -- TransUnion (NYSE: TRU) has signed a definitive agreement to sell G2 Web Services, Inc. (“G2”), Lundquist Consulting, Inc. (“LCI”) and Fintellix India Private Limited (“Fintellix”), to an affiliate of Stellex Capital Management LLC (“Stellex”), a global, multi sector investment firm with offices in New York, Detroit, Pittsburgh and London with over $2.6 billion in assets under management.

The $176 million consideration consists of $104 million of cash and a $72 million note receivable with up to three years in duration. The companies are targeting to close the transaction by the end of the year, subject to the satisfaction of customary and other closing conditions and regulatory approval. We expect to use the net cash proceeds to pre-pay debt.

TransUnion acquired Verisk Financial Services in April 2022 for $515 million for its proprietary database of card and deposit transactions, and the related advisory services it provides in our major markets. We announced that we would retain Argus Information & Advisory Services and Commerce Signals and divest the other businesses acquired in this transaction.

With this transaction, the adjusted purchase price for Argus Information & Advisory Services and Commerce Signals further supports the value of the original acquisition.

“Argus is already performing in-line with expectations, with 4% revenue growth in the second and third quarter 2022 along with an Adjusted EBITDA margin in the low-30s excluding integration costs. We have also received strong interest from consortium members to find new ways to utilize Argus’ data and insights,” said Chris Cartwright, President and CEO of TransUnion. “At the same time, several existing TransUnion customers who are not currently consortium members have expressed interest in joining.”

As leading and tenured businesses, G2, LCI and Fintellix focus on deploying sophisticated data-driven solutions to provide mission-critical risk, fraud mitigation and regulatory compliance services to their respective global clients within the financial and digital commerce sectors. Stellex will continue to invest in the people, technology and portfolio of services these companies offer and seek to drive value for their customers. Additionally, Stellex will leverage its operating network with extensive experience in data, risk and compliance to drive further value creation opportunities.

“We are confident that Stellex’s industry knowledge, operating capabilities, network of senior executives, strategic insight and access to capital make it an ideal home for these businesses, and we look forward to a smooth transition,” added Cartwright.

About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.

A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.

http://www.transunion.com/business

About Stellex Capital Management LLC
Stellex is a global, multi sector investment firm with offices in New York, Detroit, Pittsburgh and London with over $2.6 billion in assets under management. Founded in 2014, Stellex seeks to identify and deploy capital in opportunities that have the potential to provide growth, stability and operational improvement. Portfolio companies benefit from Stellex’s industry knowledge, operating capabilities, network of senior executives, strategic insight and access to capital. Sectors of particular focus include both tech-enabled and data services, business services, industrial manufacturing, aerospace & defense, government services, transportation, logistics and food. Additional information may be found at www.stellexcapital.com.

TransUnion Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including our guidance and descriptions of our business plans and strategies. These statements often include words such as “anticipate,” “expect,” “guidance,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “potential,” “continues,” “seeks,” “predicts,” or the negative of these words and other similar expressions.

Factors that could cause actual results to differ materially from those described in the forward-looking statements include: macroeconomic effects including the impact of inflation, and industry trends and adverse developments in the debt, consumer credit and financial services markets; the effects of the COVID-19 pandemic, including the prevalence and severity of the variants; the war in Ukraine and escalating geopolitical tensions as a result of Russia’s invasion of Ukraine; our ability to provide competitive services and prices; our ability to retain or renew existing agreements with large or long-term customers; our ability to maintain the security and integrity of our data; our ability to deliver services timely without interruption; our ability to maintain our access to data sources; government regulation and changes in the regulatory environment; the possibility that the expected benefits of the pending divestiture will not be realized, or will not be realized within the expected time period; the impact of the pending divestiture on TransUnion’s businesses; risks related to the distraction of management from ongoing business operations and other opportunities due to the pending divestiture; risks related to TransUnion’s indebtedness, including our ability to make timely payments of principal and interest and our ability to satisfy covenants in the agreements governing our indebtedness; and other one-time events and other factors that can be found in our Annual Report on Form 10-K for the year ended December 31, 2021, and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are filed with the Securities and Exchange Commission and are available on TransUnion’s website (www.transunion.com/tru) and on the Securities and Exchange Commission’s website (www.sec.gov). Many of these factors are beyond our control. The forward-looking statements contained in this press release speak only as of the date of this press release. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements to reflect the impact of events or circumstances that may arise after the date of this press release.

Contact:
Dave Blumberg
TransUnion
312-972-6646
david.blumberg@transunion.com

FAQ

What is the value of the transaction involving TransUnion and Stellex Capital Management?

The transaction is valued at $176 million, comprising $104 million in cash and a $72 million note.

When is the expected closing date for TransUnion's divestiture of G2, LCI, and Fintellix?

The transaction is expected to close by the end of the year, subject to regulatory approval.

How will TransUnion utilize the proceeds from the divestiture of G2, LCI, and Fintellix?

TransUnion plans to use the net cash proceeds to pre-pay debt.

What financial performance did Argus Information achieve in Q2 and Q3 2022?

Argus Information reported a 4% revenue growth in both Q2 and Q3 2022.