Verisk, a data analytics provider based in Jersey City, announced Feb. 22 that it 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.
The sale follows the company’s recently announced agreement to sell its 3E business, and marks the next step in its ongoing portfolio shaping strategy to sharpen the focus on its core businesses.
According to the announcement, Verisk Financial provides 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. The unit also addresses merchant fraud, regulatory compliance and consumer bankruptcy for financial institutions. Verisk Financial’s leading business, Argus Information & Advisory Services, is a long-standing strategic partner of TransUnion.
Scott Stephenson, Verisk chairman, president and CEO, said the company began a comprehensive portfolio review last year to identify growth opportunities for the firm.
“With the sale of Verisk Financial to TransUnion, we are sharpening our focus on our core growth engines, while unlocking value for our shareholders,” Stephenson said in a prepared statement. “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.”
Chris Cartwright, president and CEO of TransUnion, added, “Verisk Financial is a distinctive business with authoritative, proprietary data — particularly from Argus’s consortium of lender-contributed data and analytics. 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 EBITDA. Verisk Financial generated $41 million in adjusted EBITDA before corporate allocations and one-time discrete costs.
According to the announcement, Verisk intends to return the after-tax proceeds to shareholders through share repurchases. 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 advisor and Davis Polk & Wardwell as legal advisor to Verisk in connection with the transaction.
Last week, Verisk also announced a leadership succession plan, stating that Chief Financial Officer and Group President Lee Shavel will take over as CEO following Stephenson’s retirement this year. Mark Anquillare, currently chief operating officer of Verisk and group president, will then become president of Verisk.