O.C.’s Experian Considers First Public Offering

Credit data giant Experian Corp. said Wednesday that it may go public soon with a $250-million stock offering--equal to about 23% of the $1.1-billion price placed on the company when it broke away from former parent TRW Inc. less than two months ago.

In a registration statement filed with the Securities and Exchange Commission, Experian said it would use proceeds from the offering to repay a $248.7-million loan from its main financial backers, Boston investment firms Bain Capital Inc. and Thomas H. Lee Co.

But Experian chairman D. Van Skilling said in an interview Wednesday that the company also is exploring other means of raising money to repay the bridge loan. A public offering right now, he said, “is not a definite thing.”

He said the company chose to file the registration statement with the SEC now “because it takes awhile to get it approved, and we want to get rid of this bridge loan as soon as we can.”

Skilling said the company also is looking into borrowing from other sources or issuing debentures or notes to raise cash to retire the loan from Bain and Lee, which would continue to be Experian’s majority owners.

Though the IPO filing comes quickly after the management-led buyout, it was not unexpected. Bain and Lee have a history of taking their investments public to recoup their funding. Skilling and principals at Bain have said that a public offering was in their game plan for the company.

“It looks like this was their strategy from the beginning,” said Russell Diehl, managing partner of Westerly Partners, a Newport Beach investment banking firm.

“This is a company that has a positive cash flow and a healthy ongoing business, so they didn’t have to spend time fixing anything” before filing for an initial offering, Diehl said. Experian reported gross revenue of $286.1 million for the six months ended June 30 and a net profit for the first half of $22.8 million. The company has been profitable since posting a $12.2-million loss in 1992 after a major reorganization.

The SEC filing didn’t reveal the number of shares to be sold in the initial offering or state an offering price, so it is not clear whether Bain and Lee believe the value of the company has increased since the buyout from TRW. The company says it will fill in the blanks with a supplemental filing.

Bain owns 34.2% of Experian, Lee has a 34.4% stake, TRW owns a 19.2% interest and other investors, mainly Experian’s management, own 12.2%.

The company, formerly known as TRW Information Services, provides credit, marketing and real estate information on individuals, businesses and properties in the U.S. Its computer files contain information on about 190 million Americans and 93% of the nation’s households.

Data supplied by Experian and its competitors is routinely used by companies that issue credit cards and make mortgages and business loans. Experian and other credit information companies also package demographic and economic information that is sold to direct marketing companies.

Experian and Atlanta-based Equifax Inc. each control about 35% of the $1.7-billion consumer credit reporting market while Trans Union Corp. in Chicago, controls the remaining 30%.