TransUnion to buy information services firm Neustar for $3.1 billion in cash

TransUnion (NYSE: TRU) will buy Neustar for $3.1 billion in cash, the credit reporting company announced in a press release on Monday. Bringing the information services firm under its umbrella will help TransUnion expand its footprint in digital marketing and fraud prevention.

“The acquisition advances TransUnion’s strategy to diversify from its core credit solutions with complementary digital marketing and fraud mitigation capabilities,” the company said.

Neustar’s security business is not included in the deal

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The deal that is expected to close in Q4 of 2021 excludes Neustar’s security business.

Neustar serves over 8,000 customers worldwide and is estimated to report $115 million in core earnings (adjusted) and $575 million in revenue this year, the press release added. Neustar was taken private in 2017 after Golden Gate Capital bought it for $2.9 billion, including debt.  

Despite the announcement, TransUnion shares are uneventful in premarket trading. The $23.60 billion company has a price to earnings ratio of 51.58.

Highlights from CEO Cartwright’s interview with CNBC’s “Squawk Box”

According to TransUnion CEO Chris Cartwright, the combination will help promote security in online commerce. On CNBC’s “Squawk Box” this morning, he said:

“We will combine our data and analytics insight to help make trust possible in the digital economy by resolving the identity of consumers online to mitigate eCommerce fraud and help tailor marketing offers and service experiences for consumers during their online transactions.”

The chief executive reiterated that TransUnion’s core business will remain credit reporting, but its combination with Neustar – a market leader in online ID resolution – will tap into the eCommerce boom accelerated by the global pandemic and help make online transactions more secure for consumers as well as the businesses.