Experian acquires Brazilian cybersecurity firm ClearSale for $350 million

In a strategic move to enhance its identity and fraud prevention services, Experian (EXPN.L), a global leader in credit data, has announced the acquisition of ClearSale (CLSA3.SA), a prominent Brazilian cybersecurity firm, for $350 million.

This acquisition is a pivotal step for Experian as it aims to expand its presence in Brazil, the largest economy in Latin America, which is ripe with growth opportunities.

Experian, which already operates a successful subsidiary called Serasa, a leader in credit information in Brazil, views the acquisition of ClearSale as a complementary opportunity to broaden its service offerings.

Brian Cassin, Experian's Chief Executive, stated that integrating ClearSale’s advanced capabilities in transaction fraud detection will significantly strengthen Experian’s existing defenses against account opening and account takeover fraud.

Cassin emphasized, “The acquisition of ClearSale extends our ID&F suite, adding transaction fraud detection to our existing strengths.”

This move underscores Experian's commitment to delivering comprehensive fraud prevention solutions to its Brazilian customers.

Details of the deal

Experian will pay 10.56 reais per share for ClearSale, representing a 23.5% premium over ClearSale's closing stock price on October 3.

Following the announcement, ClearSale's stock surged, climbing as much as 13% in early trading.

However, it’s important to note that since its public debut in 2021, ClearSale's shares have experienced significant losses, shedding approximately 70% of their value.

ClearSale boasts an impressive portfolio, servicing around 7,400 clients and reporting strong net revenues of 504 million reais (approximately $91.72 million) last year.

The firm stated that this acquisition not only validates its solid performance but will also enhance services for customers of both ClearSale and Serasa.

The merger of their expertise is expected to deliver more comprehensive and efficient solutions to their clientele.

Experian has indicated that the total cost of the acquisition may reach 1.905 billion reais.

This funding will be sourced from a combination of existing cash reserves and the issuance of Brazilian Depository Receipts (BDRs).

Despite the substantial financial commitment, Experian anticipates that the acquisition will generate additional revenues of approximately 490 million reais and enhance core earnings by around 130 million reais in the first full fiscal year post-acquisition.

As the transaction unfolds, Experian must secure regulatory approval from Brazilian authorities, which it expects to finalize in the first half of 2025.

This acquisition exemplifies Experian's strategic focus on Brazil as a burgeoning market and reflects its broader ambitions for global expansion and technological advancements in fraud protection and identity services.