Acquisition
GUS PLC
02 October 2003
2 October 2003
GUS plc
Acquisition by FARES JV
GUS plc today announces that First American Real Estate Solutions LLC (FARES),
which is Experian's 20% owned joint venture in the United States, has acquired
Transamerica Finance Corporation's real estate tax service and flood hazard
certification businesses. The net purchase price is $375m in cash, of which GUS
will contribute $75m. The balance will come from The First American Corporation
(NYSE:FAF), which owns 80% of the FARES joint venture.
Don Robert, Chief Executive Officer of Experian North America, commented:
'Transamerica's tax and flood services fit ideally with the existing activities
of FARES. The scale and market leadership of the combined operations will allow
us to serve better the mortgage lending community and provide the most
comprehensive and accurate bundle of information products and services.
'In addition, this acquisition and the operating synergies available over time
are expected to be a major factor offsetting the impact on the profit of FARES
of the current slowdown in the mortgage refinancing market.'
Transamerica businesses
The acquired Transamerica businesses provide real estate tax services and flood
hazard certification in the United States.
The tax business accounts for roughly 80% of sales. It provides services to
mortgage lenders to help them ensure that property taxes are monitored and paid
on the real estate securing their loans. This service generates revenue over the
life of the loans. The flood business certifies the location of properties in
flood zones for insurance companies and mortgage lenders, primarily at the time
of loan origination.
In the year to December 2002, sales of the acquired businesses were $245m.
Pre-tax earnings were $66m, up from $37m in the prior year. The strong
performance has continued throughout 2003
Rationale for acquisition
The acquired Transamerica businesses will complement the activities of FARES,
which also offers flood and tax services (about 40% of sales), as well as real
estate information database services, mortgage credit information and mortgage
default management.
The acquisition will reinforce FARES' market leadership in both tax and flood
services. Significant cost synergies are expected that will result in additional
pre-tax profit in excess of $50 million on an annualised basis. These synergies
will be realised over the next 18 months as integration is completed.
Enquiries
GUS
David Tyler Finance Director 0207495 0070
Fay Dodds Director of Investor Relations
Finsbury
Rupert Younger 020 7251 3801
Rollo Head
GUS announcements are available on its web site www.gusplc.com.
The First American Corporation will host a teleconference to discuss this
transaction in more detail on Thursday 2 October 2003, at 11am EDT time (4pm UK
time). The dial-in number is (001) 888 955-3516 and the pass code is FIRST
AMERICAN. The live audio webcast of the call will be available on First
American's web site at www.firstam.com/investor. An audio replay of the
conference call will be available until 6 October 2003, by dialling (001) 402
998-1800. An audio archive of the call will also be available for replay on
First American's web site.
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 results to differ materially
from any expected future results in forward looking statements.
Notes to Editors
About FARES
In December 1997, Experian contributed its US property databases to First
American Real Estate Solutions LLC (FARES), a subsidiary of The First American
Corporation. This was in return for a 20% share in the enlarged FARES. Experian
accounts for FARES as an associate, consolidating its 20% share of FARES
profits, but no sales.
About The First American Corporation
The First American Corporation, a Fortune 500 company and the nation's leading
diversified provider of business information, supplies businesses and consumers
with information resources in connection with the major economic events of
people's lives, such as getting a job; renting an apartment; buying a car,
house, boat or airplane; securing a mortgage; opening or buying a business; and
planning for retirement. The First American Family of Companies, many of which
command leading market share positions in their respective industries, operate
within seven primary business segments including: Title Insurance and Services,
Specialty Insurance, Trust and Other Services, Mortgage Information, Property
Information, Credit Information and Screening Information. With revenues of
$4.7billion in 2002, First American has nearly 25,000 employees in approximately
1,400 offices throughout the United States and abroad.
About Experian
Experian provides strategic support to organisations around the world. It helps
its clients target, acquire, manage and develop profitable customer
relationships. It does this by combining its advanced decision support and
outsourcing services with information on consumers, businesses, motor vehicles
and property. Experian works with more than 40,000 clients across diverse
industries, including financial services, telecommunications, healthcare,
insurance, retail and catalogue, automotive, manufacturing, leisure, utilities,
property, e-commerce and government. Millions of consumers rely on Experian's
consumer credit services to meet their financial management needs. Experian is a
subsidiary of GUS plc and has headquarters in Nottingham, UK, and Costa Mesa,
California.
About GUS
GUS is a retail and business services group. It provides information and
customer relationship management services through Experian, general merchandise
through Argos Retail Group and luxury goods through a majority shareholding in
Burberry Group plc.
This information is provided by RNS
The company news service from the London Stock Exchange