TransUnion TRU yesterday completed the purchase of U.K.-based consumer credit bureau, Callcredit Information Group, Ltd. for nearly $1.4 billion (£1 billion) from private equity firm, GTCR.
The deal was initially announced on Apr 20, 2018, concurrent with TransUnion’s first-quarter 2018 earnings release. Financial Conduct Authority (FCA) – the financial regulatory body in the United Kingdom – granted nod for the buyout on Jun 12, 2018.
The company will update its full-year 2018 outlook (inclusive of Callcredit and other acquisitions completed recently) concurrent with its second-quarter 2018 earnings, which is scheduled to be released on Jul 24, before market open. The company also mentioned that some of its non-GAAP metrics such as adjusted net income and adjusted EPS will not include Callcredit’s integration-related costs.
A glimpse at TransUnion’s price trend reveals that the stock has had an impressive run on the bourse on a year-to-date basis. Shares have returned 30.1%, significantly outperforming the industry’s gain of 15.3% year to date.
Boosts Global Network & Long-Term Growth
With Callcredit being one of the three leading credit bureaus in the U.K., its acquisition is expected to help TransUnion expand its international presence. United Kingdom is considered to be the second largest credit market in the world.
Jim Peck, TransUnion’s president and chief executive officer, stated, “It’s clear that the combination of our respective assets will drive value to our investors, customers and consumers in both the United Kingdom and across global markets TransUnion serves.”
Additionally, we believe the buyout will complement TransUnion’s long-term growth strategy of enhancing its existing businesses, diversifying into new lines and expanding into vertical markets. With the help of several initiatives to increase operational efficiency and gain market profitability, Callcredit has achieved solid growth in the U.K.
Zacks Rank & Stocks to Consider
Currently, TransUnion is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Business Services sector include The Dun & Bradstreet Corporation DNB, FLEETCOR Technologies, Inc. FLT and WEX Inc. WEX. While Dun & Bradstreet and WEX sport a Zacks Rank #1, FLEETCOR carries a Zacks Rank #2.
The long-term expected earnings per share (three to five years) growth rate for Dun & Bradstreet, FLEETCOR Technologies and WEX is 4.5%, 16.5% and 14.3%, respectively.
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