Experian's £85m ClarityBlue acquisition highlights data's importance

LONDON – ClarityBlue, which manages marketing databases for Orange, BSkyB and Barclaycard, has become an Experian company in an £85m deal, with an additional £15m three-year earn-out.

ClarityBlue, which is on track for a 25% increase in revenues to £30m in the year to July 2006, said it had found the partner it needed to fulfil its aim of expanding overseas.

The two parties, which have had a working relationship for five years, also cited the chance to combine ClarityBlue's consultancy and technology with Experian's data assets and analytical services, as well as cost savings in the millions of pounds, as motivations for the deal.

Duncan Painter, CEO of ClarityBlue, said: "As an Experian company, we are looking forward to leveraging the business' considerable resources to accelerate the growth of ClarityBlue in the UK and overseas."

Painter launched ClarityBlue as the UK arm of North American company Sand Technology in 1999. He then led a £10m management buyout of ClarityBlue in 2003, with a majority stake taken by UK venture capital house ECI.

According to Painter, a third-party M&A adviser was appointed in November to contact and invite interest from global organisations capable of replacing ECI and aiding ClarityBlue's international expansion.

There were several expressions of interest, but ClarityBlue management decided early in the process that Experian would be the best partner.

Painter confirmed that all of the company's 165 employees will be kept on.

Richard Fiddis, managing director of Experian UK, Ireland and Northern Europe, said: "The acquisition of ClarityBlue reflects the strong strategic fit between both organisations and Experian's strategy of investing in successful, growing companies whose market leadership adds a new dimension to the scope, scale and range of solutions we are able to offer our clients."

According to an observer, the £85m Experian is paying is high at 17 times' current earnings.

Keith Hunt, senior partner for corporate finance at Results Business Consulting, which advices marketing services companies on corporate finance, said it reflected the hot status of database marketing companies and possible involvement in the bidding of large marketing services groups.

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