Equifax, the Atlanta-based consumer credit reporting company, said it will be able to expand data and analytics services to collection agencies and other debt collectors outside the U.S. with the $327 million acquisition of a United Kingdom technology company.
Equifax’s acquisition of TDX Group, whose applications help business clients manage and streamline debt-collection efforts, reflects the company’s continued efforts to broaden and diversify its revenue growth.
The company has expanded investments beyond its bread-and-butter consumer credit reporting business, particularly the segment tied to mortgage lending, which has fallen off as interest rates continue to rise.
Equifax International President Paulino Barros, who was traveling in London on Thursday, told The Atlanta Journal-Constitution his company will be better able to compete with rivals TransUnion and Experian in the debt-collection market outside the U.S. now that it has TDX in its arsenal.
“This will help us to enter into a segment that we do not participate today, especially outside the U.S.,” Barros said. “This [TDX] is an established business in the world and there is some potential for us to get some of this market because we have the capabilities and the skills now to do it.”
Barros said the decision to buy TDX was not made because Equifax believes consumer debt collections will increase drastically in the future. “This was not the basis for our decision,” he said.
TDX, which has about 340 employees, had revenue of about $90 million last year. Equifax has about 7,000 employees worldwide and reported $2.2 billion in 2012 revenue.
The TDX acquisition is Equifax’s second in recent months involving a company that helps businesses streamline their collections process while strengthening their return on debt-recovery efforts. Equifax also has acquired Mexico City-based Inffinix Software, which gives Equifax a footprint in Mexico and other parts of Latin America, including Brazil and Peru.
In recent quarters, the financial strength of operations not tied to the mortgage industry has helped Equifax soften the impact of a slowdown in business due to rising interest rates. Those operations have included credit reporting for governments, ID management, fraud prevention and more services to the automotive industry.
Equifax has warned that it expects mortgage originations in the most recent fourth quarter to be down between 40 percent to 50 percent, compared with fourth quarter 2012.
The company said it will release its financial results Feb. 12 for the fourth quarter and its fiscal year ending Dec. 31.
The company previously has said it expects full-year adjusted earnings per share growth to be at the higher end of a 21 to 24 percent range and revenue growth to be in the middle of a 10 to 12 percent range. Operating margin for the full year is expected to be between 26 and 27 percent.
