TransUnion (NYSE:TRU) has signed a definitive agreement to acquire majority ownership of Trans Union de Mexico, S.A., S.I.C., the consumer credit business of the largest credit bureau in Mexico, Buró de Crédito.
TransUnion currently owns approximately 26% of Trans Union de Mexico, has held seats on its board of directors for over two decades, and serves as one of its technology providers. TransUnion has agreed to acquire an additional 68% from selling shareholders, including several of the largest banks operating in Mexico. Cash consideration for the transaction is approximately MXN 11.5 billion, or $560 million using a USD/MXN exchange rate of 20.53 as of January 14, 2025 based on an enterprise value of MXN 16.8 billion, or $818 million at the previously mentioned exchange rate. With this transaction, TransUnion’s ownership would increase to approximately 94%. Buró de Crédito’s commercial credit business is excluded from the transaction.
“Our expansion in Mexico continues our commitment to making trust possible in global commerce,” said Chris Cartwright, President and CEO of TransUnion. “Credit bureaus are a catalyst for financial inclusion, and we are excited for the opportunity to bring the benefits of our state-of-the art technology, innovative solutions and industry expertise to Mexican consumers and businesses. We also look forward to supporting the country’s digital transformation objectives to empower consumers with increased economic opportunity.”
Mexico is the 12th largest global economy and second largest in Latin America, with a growing population and emerging middle class. Consumer credit in Mexico is rapidly expanding, and over half of Mexican adults have at least one financial product. While credit penetration remains lower in Mexico than other Latin American countries, it has significantly increased in the past decade, from 34% to 42% of GDP between 2013 and 20231. After the transaction closes, TransUnion intends to leverage its global operating model to strengthen Trans Union de Mexico’s services to the Mexican market, including additional efforts to drive financial inclusion.
“We anticipate that our planned acquisition of Buró de Crédito’s consumer credit business will strengthen our leadership position in Latin America and will make TransUnion the largest credit bureau in Spanish-speaking Latin America,” said Carlos Valencia, Regional President of TransUnion Latin America. “We see substantial opportunity to introduce global products like trended and alternative credit data, fraud mitigation solutions and consumer engagement tools. We also plan to expand beyond traditional financial services into adjacencies such as FinTech and insurance.”
TransUnion operates in over 30 countries and intends to leverage a proven playbook for scaling businesses internationally. Its innovative solutions include products that promote financial inclusion, mitigate fraud and empower consumers to access credit and manage their financial health. Its global technology and operating model support a best-in-class customer experience, cybersecurity and data governance. TransUnion plans to increase the number of associates in Mexico over the next several years to support the execution of the transaction and to further strengthen the company’s capabilities within the region.
“We anticipate integrating the Buró de Crédito consumer credit business into our strong global operating model as part of our International segment,” said Todd Skinner, President, International of TransUnion. “We expect to deliver strong growth over the long term, supported by favorable market dynamics and execution against our growth playbook.”
The target acquisition is expected to generate approximately $145 million2 of revenue and $70 million2 of Adjusted EBITDA3 in 2024. Based on current foreign exchange and financing assumptions, the acquisition is expected to be accretive to Adjusted Diluted Earnings per Share3 in the first year of majority ownership.
The transaction is expected to close by the end of 2025, subject to the satisfaction of regulatory approvals and customary closing conditions. TransUnion anticipates funding this transaction through a combination of debt and cash on hand.
TransUnion will host a conference call and webcast today at 8:30 a.m. Central Time to discuss the transaction agreement and certain forward-looking information. The session and accompanying presentation materials may be accessed at www.transunion.com/tru. A replay of the call will also be available at this website following the conclusion of the call.
1 Source: IMF
2 Estimated total 2024 revenue and Adjusted EBITDA of Trans Union de Mexico based on 20.53 USD/MXN exchange rate as of 1/14/25.
3 Adjusted EBITDA and Adjusted Diluted EPS are non-GAAP measures which should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as alternative measures of GAAP. TransUnion has not provided a reconciliation of non-GAAP measures to the most comparable GAAP financial measures because the non-GAAP measures are presented on a forward-looking basis, and due to the uncertain nature of acquisition-related expenses, purchase accounting fair value adjustments and other information related to the acquisition, a reconciliation could not be prepared without unreasonable effort. This information could be material to TransUnion’s results computed in accordance with GAAP.