Three deals for Equifax in Brazil

SAO PAULO/ATLANTA – In the last six weeks Equifax finalized three acquisitions in Brazil for $350 million that give the company a commanding position in that nation’s consumer credit information and credit card industries.

Last month Equifax bought the largest consumer credit information company in Brazil, Seguranca ao Credito e Informacoes (SCI), for $200 million.

On September 9 it announced taking a 59 percent stake in UNNISA, a major bankcard and private label card processor, and a 34 percent stake in PROCEDA, Brazil’s second largest information technology outsourcer.

The acquisitions came six months after Equifax took majority control of Argentina’s largest consumer credit information company, Organizacion Veraz S.A., after four years of a joint venture partnership.

The company had been looking at the Brazilian market for the last three years, William Phinney, the group executive for Latin America, said. “We’re just looking for the right opportunity,” he noted earlier this year.

The new acquisitions seem to fit the bill. SCI has 1,000 employees, 47 branch locations and provides financial information to 21,000 clients — manufacturers, financial institutions, wholesalers and retailers.

Revenues last year totaled $80 million. SCI’s commercial database “offers a complete picture of more than two million businesses in Brazil,” an Equifax statement said. The consumer database has 5 million names on it.

Combined UNNISA and PROCEDA have more than 1,600 employees and revenues of $121.7 million for the twelve months ending June 30 of this year. UNNISA alone had revenues of $66 million.

“These are major strategic acquisitions for Equifax,” spokeswoman Martie Zakas said. “We are now in 7 Latin American countries – Chile, Argentina, Colombia, Peru, El Salvador, Mexico and Brazil.

“The acquisitions in Brazil mark a very critical completion because it puts us into the largest country in Latin America, with the 5th largest population in the world and the 8th largest economy.

“We feel there is a lot of opportunity on the consumer side in Brazil, with a lot of room to expand especially in the credit card industry. Credit information is needed to help better target the market and carry out risk assessment.”

Equifax expects a great deal of synergy in the two businesses, she added. “As the credit card industry grows and matures there is an increased need for consumer credit information.” Brazil’s credit card industry is growing at a 25 percent annual clip, she said.

“Clearly we don’t like the current uncertainty in Brazil’s markets but positioning ourselves in Brazil was important for us long term. We are clearly where we want to be in that market.”

Equifax entered the Latin American market in 1994 and has expanded at a steady pace of one or two countries a year ever since, usually through acquisitions.

“In our acquisitions program we look for strong companies with a very good management team and that’s what we got,” Zakas said. “Our companies are managed locally but we look to enhance them with Equifax expertise in terms of products, services and technology.”

Equifax first went international in the 1920s when it opened up business in Canada. In recent years it has entered the European market where the company is active in the UK, Ireland, Spain, Portugal and France.

No plans exist for entering the German market as of now, Zakas said, and the company does not have operations in Asia beyond an interest in a third party processing plant for credit cards in India.

Most of the company’s revenues from outside the US come from Europe at the moment, but Latin American sales are growing “and this acquisition should increase revenues even more,” Zakas noted.

In another Latin American venture, Equifax’s Goldleaf Technology subsidiary, a company acquired at the end of last year, has installed the first Automated Clearing House network in Panama.

The Centro de Intercambio Automatizado S.A. is a network that represents one fifth of all Panamanian banks. Installation allows same day settlement in Panama.

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