Acquisition

Experian Group Limited
26 June 2007


26 June 2007


                             Experian Group Limited


                             Acquisition of Serasa



Experian, the global information solutions company, is pleased to announce that
it has agreed to acquire an initial 65% stake in Serasa, the market leading
credit bureau in Brazil and operator of the fourth largest credit bureau in the
world, from a consortium of Brazilian banks. The stake will increase to 70% over
the next six months. The purchase price for the initial stake is R$2.32bn
($1.2bn)1, inclusive of transaction costs, net of cash, and will be funded from
Experian's existing facilities. The transaction, which is expected to be
earnings neutral in the first full fiscal year of ownership and earnings
enhancing thereafter, is expected to complete by the end of June.


Don Robert, Chief Executive of Experian, commented:


'The acquisition of Serasa represents a unique and transformational opportunity
for Experian. It propels us to a market leading position in one of the most
attractive growth markets for credit products globally, and we see significant
potential as we deploy our world-class value-added products. It fits our
strategic objectives of owning market-leading credit bureaux in key markets
around the world and of expansion into exciting emerging economies. We are also
delighted to have the continuing support of Brazil's largest banks, as both
shareholders and clients of Serasa.'


Transaction highlights


   • Serasa consolidates Experian's global leadership position in Credit
     Services. Following this acquisition, Experian will control three of the 
     top five credit bureaux worldwide (US, UK and Brazil), and hold 
     market-leading positions in other major credit markets. The transaction 
     meets our strategic and our financial criteria.

   • The acquisition places Experian in an excellent position to benefit from
     the high growth Brazilian credit market:

      + •Serasa is the recognised Brazilian market leader, owning the largest
         consumer and commercial credit bureau with a c. 60% market share. It
         holds the largest credit data assets in Brazil and has a diversified 
         and growing customer base.

      + •The Brazilian credit market is in early stages of development with
         significant scope for growth, stimulated by the improving macroeconomic
         environment. Credit outstanding as a proportion of GDP is low by
         comparison to mature credit economies. Both consumer and commercial
         lending are growing strongly, while the Brazilian mortgage market is in
         its infancy.

   • There is significant potential for Experian to leverage its credit
     bureau expertise further to drive Serasa's growth, particularly through the
     introduction of value-added products from our Credit Services and Decision
     Analytics activities.

   • There is potential for Experian to build on the strong platform provided
     by Serasa to deliver products from the wider Experian portfolio, for 
     example Marketing Solutions.

   • Serasa has a strong financial track record having grown sales at over
     20% per annum for each of the past two years. EBIT margins are good, in
     excess of 20%, and have scope to improve further, underpinned by high 
     growth in credit volumes and operational gearing.

   • Serasa has a strong and experienced management team, which will remain
     with Experian, with a good cultural fit. The company has won numerous
     employer awards, including 'Best Place to Work in Brazil' for four
     consecutive years. The President of Serasa is Elcio Anibal de Lucca, who
     will remain in the same position going forward.

   • There are put and call options associated with the shares owned by the
     remaining principal shareholders in Serasa. These are exercisable from the
     fifth anniversary of the closing of the transaction, for a period of five
     years.

   • The acquisition is expected to be neutral to Benchmark earnings2 in the
     first full year of ownership (to March 2009) and enhancing thereafter. In
     addition, Experian expects a cash benefit from tax relief on the goodwill
     generated by this acquisition of R$70m-R$100m per annum for the next seven
     years (based on 100% stake).

There will be a presentation today at 9.30am UK time to analysts and investors
at the Merrill Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ.
The presentation can be viewed live on the Experian website at
www.experiangroup.com and can also be accessed live via a dial-in facility on 44
(0)20 8322 2180.


There will be a conference call today to discuss the transaction at 3.00pm UK
time, with a recording available later on the website.


Enquiries


Experian

Don Robert
Chief Executive Officer                                       [phone]
    
Paul Brooks
Chief Financial Officer

Nadia Ridout-Jamieson 
Director of Investor Relations


Finsbury

Rollo Head                                                    [phone]
James Wyatt-Tilby



Description of Serasa


Serasa is the fourth largest credit bureau in the world, and is the largest
credit bureau outside the US. Consumer credit activities account for 60% of
group sales and commercial activities for 40%.


Founded in 1968, Serasa owns the most extensive databases in Brazil on the
credit behaviour of consumers and companies. Its credit information database
includes 161 million Brazilian consumer records and c. 5 million Brazilian
company records. It plays an active role in most credit and business related
decisions made in Brazil on a daily basis. Its data-gathering capabilities are
extensive, sourcing data from a network of Brazilian banking, commercial and
judicial organisations, over 45,000 accountants and more than 5,500 notaries.
Serasa's databases include payment practices, public defaults, social and
demographic information and economic and financial information.


Key products include:


   •Consumer: the largest database in Brazil of consumer credit and
    insolvency behaviour, bounced cheques and overdue loans, and the largest
    database in Brazil of stolen cheques.


   •Commercial: credit risk assessment of commercial enterprises, complete
    reports of business behavioural habits, including information on bankruptcy
    and overdue loans and commercial information on both Brazilian and
    International companies.


Serasa's client base is diverse, and the company is not dependent on any single
industry segment.


As at December 2006 Serasa had over 110,000 direct clients. Serasa's clients
include large Brazilian companies, multinationals (many of whom are existing
clients of Experian in other markets) and small and medium-sized enterprises.
Examples include many of the largest banks in Brazil including Bradesco, Itau,
Unibanco, ABN Amro, Banco Santander and HSBC (the minority shareholders in
Serasa), Pao de Acucar (the largest retailer in Brazil), Telefonica, TAM (the
Brazilian airline company), Organizacoes Globo (the largest media organisation
in Brazil) and multinational companies such as American Express and Carrefour.


Revenue concentration among Serasa's largest clients is low, with the top ten
clients accounting for only 21% of sales, and the top 25 accounting for 36% of
sales. Serasa also has a wide distribution across industry segments. For
example, for the core consumer credit bureau activities banks and finance
accounted for less than 50% of sales, with telecommunications, retail and
insurance included in the balance.


The company is well established, with over 2,200 employees, operating across
over 80 locations, including all Brazilian state capitals and major cities.


Strategic rationale


Brazil: an attractive growth market for credit

Experian will benefit from the growth in demand for credit in Brazil. As the
credit market grows, it stimulates demand for information and tools to drive
customer acquisition, account management, debt collection and other areas of
credit risk, products which are core to Experian's Credit Services activities.


Brazil is one of the largest and fastest expanding markets for credit in Latin
America, in part driven by the strong and improving macroeconomic environment,
and yet it is still emerging by the standards of more developed markets. Demand
for both consumer credit and commercial credit is increasing rapidly, and there
is considerable scope for future development of the mortgage market.


The attractions of Brazil include:


   •The largest population centre in Latin America, with a population of over
    190 million, including a high proportion under the age of 19, or those who
    have yet to become credit active.


   • Very low penetration of credit products by comparison to more developed
    markets. For example, the ratio of total lending relative to GDP in Brazil
    was 91% in 2006, compared to 288% in the US and 169% in the UK (Source:
    Merrill Lynch).


   •Strong growth in demand for consumer credit, including credit cards.
    Total consumer credit outstanding has grown by 30% on a compound annual
    basis over the past three years, driven by rapidly expanding household
    disposable income (Source: Banco Central do Brasil).


   •Strong demand for commercial credit, supported by rapid growth in small
    and medium enterprises. Total commercial credit has grown by 17% on a
    compound annual basis over the past three years (Source: Banco Central do
    Brasil).


   •The mortgage market is currently at a very early stage of development.
    Total consumer mortgage outstanding in Brazil in 2006 was $0.7bn, compared
    to $3,328bn in the US, for example (Source: Banco Central do Brasil, US
    Federal Reserve).


These dynamics are underpinned by the increasing attraction of Brazil as an
investment market, driven by a strong GDP outlook, recent declines in the rate
of inflation, declining interest rates, stable unemployment levels and a
significant reduction in the country risk premium.


Significant synergy opportunities

The acquisition of Serasa provides significant opportunity to leverage
Experian's deep analytical, database and software capabilities, building on
Experian's global leadership position in provision of value-added Credit
Services and Decision Analytics activities.


Serasa currently derives the majority of its sales from the acquisition part of
the customer lifecycle. There are immediate synergies to be realised from the
introduction of products that operate across the breadth of the credit cycle,
specifically by cross-selling Experian's solutions and tools that address
account management and debt collections. Additionally, there are opportunities
to introduce Experian's fraud management tools. Examples of immediate
opportunities include:


   •Consumer bureau synergies through the introduction of authentication
    services, collection offerings such as Triggers, a broader range of consumer
    account management services, risk modelling and decisioning software.


   •Commercial bureau synergies through the introduction of Trigger services,
    commercial risk modelling and small business loan systems from Baker Hill.


In the longer term, there is potential for additional upside opportunity from
the introduction of products and tools from the wider Experian portfolio, such
as Marketing Solutions, for example by building on Experian's recent acquisition
in Brazil of Informarketing and through the introduction of email marketing.


Financial performance


Serasa has a strong financial track record of both sales growth and margin
expansion. Sales growth has been driven by the increased demand for credit and
thus additional credit transactions, while Serasa has also benefited from growth
in number of clients, as well as increased client penetration reflecting product
innovation. Margin improvement largely reflects the growth in scale of Serasa's
activities.


In the year to December 2006 Serasa generated sales of R$607 ($313m), up 22% at
constant currency, and EBIT (Brazilian GAAP) of R$138m ($71m), up 28%.


In the year to December 2007 Serasa is expected to generate sales growth in the
region of 20%. Margins are expected to improve reflecting operational gearing,
before estimated integration costs in the year of R$15m. In addition, due
diligence indicates that EBIT will be positively impacted by the restatement
from Brazilian GAAP to IFRS. Preliminary estimates for the incremental benefit
to EBIT are in the region of $R20m. The IFRS adjustments are expected
principally to reflect the differential treatment of capitalisation of data
costs. These accounting adjustments do not impact the acquisition assessment.


The acquisition is expected to be neutral to Benchmark earnings2 in the first
full year of ownership (to March 2009) and enhancing thereafter. In addition,
Experian expects a cash benefit from tax relief on the goodwill generated by
this acquisition of R$70m-R$100m per annum for the next seven years (based on
100% stake).


As at 31 December 2006 Serasa had gross assets of R$321m.


Experian's stake in Serasa was acquired from Bradesco, Itau, Unibanco, ABN Amro,
Banco Santander and HSBC.



Financial information is based on audited financial statements, unless otherwise
stated. Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and are subject to
a number of risks and uncertainties that could cause actual events or results to
differ materially from any expected future events or results referred to in
these forward-looking statements.


1 Based on an exchange rate of R$1.94 per US$.


2 Benchmark earnings: earnings before amortisation of acquisition intangibles,
goodwill impairments, changes in respect of demerger-related equity incentive
plans, exceptional items, financing fair value measurements and attributable
taxation.






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