Global information and risk management solutions provider TransUnion (TRU) has signed an agreement to acquire Virginia-based identity resolution company Neustar for $3.1 billion in cash. Based out of Chicago, TransUnion offers analytical services, risk scores, consumer reports and decision-making capabilities to businesses.
The acquisition will expand TransUnion’s digital identity capabilities by adding Neustar’s data and analytics. TransUnion expects the deal to boost its growth through increased participation in the digital marketing and identity fraud markets and via material revenue synergies. It further expects the transaction to be accretive to its adjusted EPS starting 2023.
Neustar provides real-time information and analytics for the marketing, entertainment, telecommunications, defense, digital performance, risk and Internet industries. It is projected to generate revenue of around $575 million and an adjusted EBITDA of $115 million in 2021.
The President and CEO of TransUnion, Chris Cartwright, said, “As digital commerce continues to grow globally, TransUnion’s powerful digital identity assets, enhanced by Neustar’s distinctive data and digital resolution capabilities, will enable safer and more personalized online experiences for consumers and businesses.”
The acquisition will help TransUnion in its strategy to diversify from its core credit solutions by adding digital marketing and fraud mitigation capabilities. Meanwhile, the transaction is likely to close in the fourth quarter.
TransUnion’s shares closed 2% lower at $120.71 on Monday. (See TransUnion stock chart on TipRanks)
Last month, Barclays analyst Manav Patnaik maintained a Buy rating on the stock and raised the price target to $140 from $130 (16% upside potential). In a research note to investors, the analyst said, “After a rough start to the year, the three credit bureaus have rebounded strongly with momentum on their side.”
Overall, the stock has a Strong Buy consensus rating based on 9 Buys and 1 Hold. The average TransUnion price target of $134 implies 11% upside potential. Shares of the company have gained 39.1% over the past year.