TransUnion Enhances Consumer Identity Protection Offerings with Agreement to Acquire Sontiq for $638 million
The combined company will offer comprehensive identity solutions, further empowering consumers and businesses to shape and protect their financial futures
TransUnion (NYSE: TRU) has signed a definitive agreement to acquire Sontiq, a leader in digital identity protection and security. Sontiq provides solutions to empower consumers and businesses to proactively protect against identity theft and cyber threats, including identity monitoring, restoration, and response products and services. Sontiq’s focus on identity security complements TransUnion’s digital identity assets and solutions, and the combined company will offer a comprehensive set of omnichannel solutions to make trust possible for consumers and businesses.
Headquartered in Nottingham, Md., Sontiq is expected to generate approximately $85 million of revenue in 2021, and grow double-digits in the future driven by significant revenue synergies. Sontiq operates with an attractive Adjusted EBITDA margin of approximately 40% that is expected to increase as a result of high-margin revenue growth. TransUnion will acquire Sontiq for approximately 19 times expected FY2021 Adjusted EBITDA and expects the acquisition to be neutral to Adjusted Diluted EPS in 2022 and accretive thereafter.
“As online commerce rapidly accelerates, TransUnion has calibrated its business to address consumer and customer challenges relating to identity,” said Chris Cartwright, President and CEO of TransUnion. “Augmenting our Consumer Interactive business with Sontiq’s identity and cyber protection services will advance our work to enable consumers and businesses to transact with greater certainty.”
Acquisitions like TLO, iovation, TruOptik and others, combined with TransUnion’s historic strengths as a credit bureau, have built a strong foundation, enabling the company to resolve identity across a wide range of use cases.
“TransUnion is committed to empowering consumers to shape their financial futures. With Sontiq, we will ensure that consumers and businesses have a comprehensive set of tools to protect the financial profile they have built,” said Steve Chaouki, President of U.S. Markets and Consumer Interactive at TransUnion. “We will make these identity protection tools accessible to consumers where they need them, by leveraging our strategic partnerships across all of the markets we serve.”
Sontiq’s Intelligent Identity Security platform serves as the foundation of its identity theft and cyber threat protection solutions for consumers. Sontiq delivers these solutions directly to consumers and through partners and customers as well via its product brands: IdentityForce, Cyberscout and EZShield. Sontiq’s identity security monitoring products — which already utilize TransUnion’s credit data — are highly complementary to TransUnion’s capabilities, and will result in a comprehensive set of offerings that will significantly increase growth opportunities for the combined business.
“We are excited to enter into the next phase of Sontiq’s growth with TransUnion,” said Sontiq President and CEO Brian J. Longe. “Together, we share a commitment to innovation and helping consumers and businesses protect their financial profiles and everything they have built. Not only will our combined products and solutions benefit our customers and partners, but the customer-first focus demonstrated by both organizations is impressive and will create long-term success for all.”
Key Benefits of the Proposed Transaction:
- The acquisition of Sontiq will create a best-in-class consumer identity protection platform that will advance TransUnion’s focus on digital safety and security and will provide comprehensive solutions for businesses and consumers.
- The combined company will possess a scaled and highly profitable product offering to grow in the identity protection market and evolve TransUnion’s complementary consumer strategy for direct and indirect channels.
- TransUnion will bolster its direct business with more holistic, premium solutions to use in-market after closing and leverage additional capabilities to cross-sell in the indirect market while extending into new end markets like employee benefits and insurance.
- Sontiq’s flexible Intelligent Identity Security (IIS) platform will provide new co-branded capabilities that enable greater customization to serve a variety of business and partner use cases.
The transaction is expected to close in Q4 2021 subject to the satisfaction of customary closing conditions and regulatory approvals.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing a comprehensive picture of each person so they can be reliably and safely represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences, and personal empowerment for hundreds of millions of people.
Sontiq (pronounced Son-tick) is an Intelligent Identity Security company arming businesses and consumers with award-winning products and services built to protect what matters most. Sontiq’s brands, IdentityForce, Cyberscout and EZShield provide a full range of identity and cyber monitoring solutions, best-in-class restoration, and response products and services. Sontiq’s products are used by an ever-growing community and empower millions of customers and organizations to be less vulnerable to the financial and emotional consequences of identity theft and cybercrimes. Sontiq and its brands have an outstanding track record for delivering high-touch support and fraud remediation services, demonstrated through its 99% customer satisfaction ratings. Sontiq is a portfolio company of the Wicks Group. Learn more at www.sontiq.com or engage with us on Twitter, Facebook, LinkedIn or YouTube.
TransUnion Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including our guidance and descriptions of our business plans and strategies. These statements often include words such as “anticipate,” “expect,” “guidance,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “potential,” “continues,” “seeks,” “predicts,” or the negative of these words and other similar expressions.
Factors that could cause actual results to differ materially from those described in the forward-looking statements include: failure to realize the synergies and other benefits expected from the proposed acquisition of Sontiq; the risk that required regulatory approvals are not obtained or are obtained subject to conditions that are not anticipated; the failure of any of the closing conditions in the definitive purchase agreement to be satisfied on a timely basis or at all; delay in closing the proposed acquisition; the possibility that the proposed acquisition, including the integration of Sontiq, may be more costly to complete than anticipated; business disruption during the pendency of the proposed acquisition and following the acquisition closing; risks related to disruption of management time from ongoing business operations and other opportunities due to the proposed acquisition; the effects of pending and future legislation and regulatory actions and reforms; macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets and other macroeconomic factors beyond TransUnion’s control; risks related to TransUnion’s indebtedness, including our ability to make timely payments of principal and interest and our ability to satisfy covenants in the agreements governing our indebtedness; the effects of the ongoing COVID-19 pandemic on TransUnion, Sontiq or our ability to complete the acquisition; and other one-time events and other factors that can be found in our Annual Report on Form 10-K for the year ended December 31, 2020, and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are filed with the Securities and Exchange Commission and are available on TransUnion’s website (www.transunion.com/tru) and on the Securities and Exchange Commission’s website (www.sec.gov). Many of these factors are beyond our control. The forward-looking statements contained in this press release speak only as of the date of this press release. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements to reflect the impact of events or circumstances that may arise after the date of this press release.