Atlanta-based consumer credit and information giant Equifax announced on Monday it plans to buy the credit services unit of Computer Sciences Corp. for $1 billion.
The credit unit of CSC sells Equifax services, and the deal is similar to a corporation buying operations from a franchisee.
Equifax said the CSC credit business provides credit reporting services across the financial industry, including to banks, mortgage companies, retailers and healthcare companies, and owns credit files in 15 states. CSC has been Equifax’s largest affiliate since 1988.
Equifax Chairman and CEO Richard Smith called the deal “perfect timing,” as CSC has been divesting certain assets and the credit business fits well given the companies’ close ties.
“It’s core to who we are,” Smith said in an interview. “It’s extremely low risk in our ability to execute this (deal).”
The transaction is expected to provide Equifax with a $200 million tax benefit over 15 years, plus annual net operating revenue of up to $125 million. The deal is expected to close by year end.
Equifax forecasts a 45-cent to 50-cent annual boost to adjusted earnings per share in 2013 as a result of the acquisition.
Equifax shares rose nearly 5 percent in afternoon trading.
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