TransUnion Acquired by Advent and Goldman Sachs

Earlier today, Chicago-based TransUnion Corp. announced that it had signed an agreement to be acquired by private equity firm Advent International and Goldman Sachs (GS Capital Partners VI Fund, LP) in deal estimated at $3 billion. The transaction, expected to close late in the first quarter, would see TransUnion swap private owners. Current owners include private-equity firm Madison Dearborn Partners and Chicago’s Pritzker family (the Pritzker family sold a 51% stake in TransUnion to Madison Dearborn in April 2010).

TransUnion is a leading global provider of information management and risk management solutions. It provides consumer credit and data reports, credit scores, analytical services, and decisioning technology to businesses. TransUnion competes with Experian and Equifax (known as the big 3 in credit reporting), which are both public. The company filed for an IPO in July 2011 but was then reported to be in talks with The Carlyle Group, Bain and Advent in October. We believe the strong debt  markets made the sale the preferred choice given the somewhat continued uncertain nature of the public markets.

We estimate that the deal was struck at approximately 3.0x revenue and 9.0x EBITDA on a trailing basis. We expect to see several more private equity led financial technology deals (though perhaps smaller than the Transunion deal) through the balance of 2012.