$225 Million Purchase Makes Experian No. 3 Support Firm for Direct

Experian Corp., the credit data company formerly known as TRW, has acquired Direct Marketing Technologies Inc., which builds and maintains corporate data bases.

The deal pushes Experian up three notches to become the third-largest direct-marketing company, after Acxiom Corp. and MetroMail.

Experian said it paid $222.5 million for the Schaumburg, Ill., company, known as Direct Tech. As part of the deal, Experian said, it is to repay Direct Tech's debts of $23.7 million.

Experian said it could make additional cash payments of up to $52.5 million through 2001, depending on Direct Tech's performance.

"It's a good strategic fit for us globally," said Experian chief executive D. Van Skilling.

The credit reporting company also has direct-marketing operations in the United Kingdom and the Netherlands. Last November, Experian was acquired by Great Universal Stores PLC, a retailing and credit information company based in the United Kingdom.

Mr. Skilling said the acquisition would help Experian's 10-year-old marketing information services business, which has been growing 20% a year and accounts for about a quarter of its overall business.

Direct Tech, which has also seen 20% growth, brings expertise in list processing and customer data base management.

"They cover vertical markets," Mr. Skilling said. "Where they're very strong, we're not as strong. We're particularly strong in financial services and real estate, they're very strong in the catalogue industry, retail, and some of the high-tech direct marketing."

Direct Tech is to operate as a subsidiary of Experian. Thomas Newkirk will remain chairman and R. Scot Thomas president and chief executive officer.

The direct-marketing company describes itself as the largest provider of computer services to the catalogue industry. The mailing lists it processes for clients result in more than 10 billion pieces of advertising mail a year-over 15% of the U.S. total for such mail.

Gary Laben, vice president for strategic marketing and business development at Experian, noted a recent trend that has companies that serve the financial services industry buying direct-marketing firms. Last year, for example, First Data Corp. acquired Donnelly Marketing.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER