Equifax Inc. (NYSE:EFX), consumer-credit reporting agency, has offered a bid to Australia’s most dominant player in this domain, Veda Group Ltd. The move calls for the company’s ambitions to foray into Australian consumer-credit market. If Equifax will be able to procure Veda than it would bring the firm in front row of the leading credit consumer reporting companies in Australia. Australia’s consumer credit market is continuously booming, which will be a great bonus for the firm if it wins Veda.
Equifax proposed an all-cash offer valued at roughly 2.28 billion Australian dollars (US$1.64 billion) for Veda assets. The firm is offering 35% premium to Sydney-based Veda’s shares price closed on Thursday. On the acquisition news Veda’s stock hiked substantially in intraday trading Friday.
“Veda is a strategic asset,” said Ed Prendergast, a portfolio manager at Pengana Capital in Melbourne, which owns shares in the Australian company.
There is a famous saying “If you can’t build it buy it.” Equifax is seemingly working on a similar plan as it is still a new player in Australian market. It takes time to build a business in a market where other companies dominate and it would be costly too, but directly laying hands on the major regional market player is a smart and secure move. The firm said that buying Veda is a strategic move to boost its international market presence.
According to Veda, it would assess the proposal but the decision will be made subjecting to conditions including due diligence and approval from regulators including Australia’s Foreign Investment Review Board, which advises the government on foreign takeovers.
Veda has credit information of nearly 20 million individuals and 5.7 million enterprises in Australia and New Zealand.
Equifax is a much larger company which is one of the leading credit data and analytics providers in the U.S., Brazil, Canada and more than dozen other countries. Last year the firm bought U.K.-based debt management software company TDX Group, which has a regional office in Sydney.
