Ann: Kyckr announces reseller agreement with illion, page-7

https://www.theaustralian.com.au/bu...s/news-story/98aeeb1352d676e3f809dedd4bf3c04b


“Illion price of $1.5bn lure to competitors

• by BRIDGET CARTER
• SEPTEMBER 27, 2019

Archer Capital is believed to be asking at least $1.5 billion for its Australian credit check company Illion, prompting some to suggest the business may only sell if a competitor, rather than a private equity firm, steps up to the plate.

The company that was the former Australian Dun and Bradstreet operation, is up for sale though Houlihan Lokey and Citi and generates about $100m in annual earnings before interest, tax, depreciation and amortisation.

While most private equity firms are expected to look at the business, the general consensus is they are unlikely to be in a position to outlay such a large sum for what is generally considered a highly attractive operation.

To achieve a price of more than $1.5bn, or even $2bn, a competitor in the sector needs to come along that would justify such a large price due to strong synergies, say sources.

The price equates to a multiple of more than 15 times its EBITDA and while comparable businesses have sold at such prices globally in recent times, the buyers have not been private equity. However, Dun and Bradstreet globally sold for 12 times. But others have sold for close to 20 times, including TransUnion and a deal involving Core Credit Union in the US.

When Illion was purchased, about two thirds of the acquired operations were consumer-related, and the plan has been to drive more of a business to business focus.

Archer paid $220m for the operation in 2015.

At the Australia M&A Forum in Sydney on Thursday, dealmakers and private equity firms told the audience that interest rate cuts had enabled buyers to pay more for assets, but many suitors had not yet adjusted for the change and had lifted their offers. They said deals were now being more conservatively geared than they had been in the past.

Another discussion point was that superannuation funds are increasingly taking an active role in deals, according to forum speakers, including Australian Super, which has $160bn under its control, $35bn of which is invested in public equities.”