Credentials, Medical Science Planning IPOs
Credentials Services International Inc., a consumer credit monitoring company, said Wednesday it hopes to go public soon and raise up to $40 million with its initial stock offering.
The company provides consumers with copies of the credit profiles prepared by companies like Experian Inc., Equifax Inc. and Trans Union Corp.
Subscribers also are notified by Credentials when negative information is added to their credit reports, and when merchants, banks or others access their files.
Credentials was formed in 1994 as a spinoff of what then was TRW Information Services--now Experian. The former TRW executives who founded Credentials have since sold the company, which has a 10-year contract under which Experian provides most of the data that it supplies to its subscribers.
Credentials competes with Orange-based Experian in marketing consumer credit reports, but says its notification services are unique.
Company President David Thompson could not be reached for comment Wednesday.
The proposed stock offering prospectus, filed Wednesday with the Securities and Exchange Commission, says that company posted a $1.5-million profit on $28.2 million in revenue for the first nine months of fiscal 1997. The company lost $22.5 million in its 1996 fiscal year, ended Sept. 1, according to the filing. Revenue totaled $24.5 million.
Credentials, with about 170 employees, sells its services through mail and telemarketing campaigns. Its prospectus attributed the 1996 losses to direct marketing campaigns that failed because they were not co-sponsored by major banks or credit card issuers.
The company says it has 1.2 million subscribers and that about half its business comes from campaigns co-sponsored by Bank One and Chase Manhattan Bank.
Its filing said that “certain key executives” were “replaced” in the wake of the 1996 losses and that it has instituted unspecified new operating and financial controls.
No date has been set for the public offering, to be underwritten by PaineWebber Inc. and Hambrecht & Quist, and the number of shares was not disclosed. The stock will be sold by the company and several existing shareholders.
The company said it intends to use proceeds of the stock sale to repay $15 million in debt and to finance ongoing operations.
