TransUnion ( TRU ) on Thursday signed a definitive agreement to acquire a majority stake in Trans Union de Mexico, a key consumer credit business owned by Mexico’s largest credit bureau, Buró de Crédito.

Currently, TransUnion ( TRU ) owns 26% of the Mexican business and has held seats on the board for over 20 years.

With this new acquisition, TransUnion ( TRU ) will purchase an additional 68% of the company from major shareholders, including Mexico’s largest banks, for approximately MXN11.5 billion (about $560 million).

This will increase TransUnion’s ownership to about 94%.

The transaction, which is expected to close by the end of 2025, will exclude Buró de Crédito’s commercial credit business.

TransUnion’s expansion in Mexico supports its goal of fostering financial inclusion.

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Chris Cartwright, CEO of TransUnion ( TRU ), emphasized that credit bureaus play a crucial role in providing consumers and businesses with access to financial opportunities.

Mexico, the 12th largest global economy, is seeing rapid growth in consumer credit.

Over half of Mexican adults now have at least one financial product, and credit penetration has risen significantly in recent years. Following the deal, TransUnion ( TRU ) plans to enhance services in Mexico, introduce global products like alternative credit data and fraud solutions, and expand into sectors like FinTech and insurance.

The acquisition is expected to generate approximately $145 million in revenue and $70 million in Adjusted EBITDA for 2024.

TransUnion ( TRU ) aims to fund the transaction through a combination of debt and cash, and the deal is expected to be accretive to earnings in its first year.

TransUnion ( TRU ) held cash and equivalents of $643 million at September 30, 2024.

Price Action: TRU shares are trading higher by 5.81% to $95.08 premarket at last check Thursday.

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