Advent International Corp. and Goldman Sachs Group Inc.'s private equity arm agreed to buy TransUnion Corp., the third largest provider of credit information to banks and consumers, from Chicago's billionaire Pritzker family and local private equity firm Madison Dearborn Partners LLC for over $3 billion, TransUnion said.
The deal, the biggest private-equity-backed buyout this year, is expected to close in the late first quarter or early second quarter of 2012. TransUnion Chief Executive Officer Bobby Mehta and the rest of the company's leadership team will remain with TransUnion.
In 2010, Madison Dearborn purchased a 51 percent stake in TransUnion from the Pritzker family at more than $2 billion, including $1.6 billion in debt. Madison Dearborn is expected to land a big return in the mid-50s percentage range on the latest deal.
Plans for an initial public offering have been shelved as rising interest in corporate debt enabled Advent and Goldman to make a large-enough offer to lure Madison Dearborn and the Pritzker family to sell TransUnion to the private-equity investors, people familiar with the matter told The Wall Street Journal.
Business owners can cash out of their previous investment by taking the company public through an initial public offering or selling the company to other players, whichever gets a better valuation.
The two buyers will pay for TransUnion with more than $900 million of cash and about $2.2 billion of new and existing debt. This is seen as a sign that investors are becoming more comfortable with companies carrying higher debt loads, according to The Wall Street Journal.
In 2011, TransUnion gained $40.8 million in profit, up from $36.6 million in 2010, according to the company's filings. Revenue increased to about $1 billion, from $956 million a year earlier.
TransUnion was advised by Bank of America Merrill Lynch and Deutsche Bank and the law firm Latham & Watkins. Evercore Partners advised Advent and Goldman Sachs.