Equifax Buys Polk’s Consumer Information Solutions Units

Equifax, the Atlanta-based information company, has signed an agreement to acquire the Customer Information Services Group of R.L. Polk & Co., Southfield, MI. Valued at approximately $260 million, the purchase includes Polk’s Direct Marketing, Data Information Services/Polk Verity, Compusearch/Prospects Unlimited of Polk Canada and Polk City Directory.

The deal, which is expected to close by April 30, also includes an eight-year reciprocal data licensing agreement between the two companies.

Combined, the units purchased by Equifax contain data on 180 million consumers and 105 million households. This information is culled from 250 sources, including product registration, direct marketing, geodemographic and analytic service information. The businesses are expected to have $165 million in sales for the fiscal year ending March 31.

Polk will retain its Global Transportation Business, which provides services to the automobile industry; the automotive-related portions of Polk Canada; and its Geographic Data Technology and Carfax subsidiaries.

John Healy, currently senior vice president and general manager of the direct marketing group included in the acquisition, will join Equifax as the unit’s executive vice president and group executive, reporting directly to Equifax president and COO Lee Kennedy. The unit, Kennedy said in a conference call yesterday, would operate as a separate business group.

Equifax CEO Tom Chapman said that the purchase would build on his company’s data management and processing abilities; enhance growth opportunities to its “invitation to apply” marketing efforts; and, through securing an independent data source, enhance Equifax’s drive to provide customer relationship management tools.

Included among the acquired properties are the TotaList and Lifestyle Selector databases. The direct marketing group they are a part of accounts for $98 million, 60% of the revenue of the purchased properties, according to Kennedy. Polk City Directory generates one third, or $55 million of the group’s revenue, with the rest generated by the Canadian Compusearch/Prospects Unlimited operations.

Most industry observers agree that the merger will help mailers by bringing another significant player into the market. They also note Equifax will have a direct marketing arm similar to those of the other major credit bureaus.

However, some wondered about the impact of the recent Supreme Court ruling upholding the Driver’s Privacy Protection Act. The Shelby amendment to the DPPA requires that state motor vehicle programs get express permission from drivers before releasing motor vehicle registration data for marketing purposes, potentially limiting the availability of such data to products such as TotaList.

Equifax executives downplayed these concerns. “The Supreme Court ruling on the Amendment is a non-event in this transaction,” said Michael Shannon, senior vice president, corporate development for the credit bureau. “It is one of many, many different sources of data for TotaList. It is not critical for the success of TotaList.

“However, we believe that the data will continue to be available, if not from the states than from other sources,” Shannon continued. “There are opt-in data.”

Shannon added that the Shelby amendment “affects the transportation side more than the direct marketing side,” referring to the operations retained by Polk. Polk will continue to serve the automotive industry, although the two companies are expanding their strategic relationship to jointly serve their mutual customers.

Industry observers wonder whether Equifax will keep Polk’s city directory business. At least one corporate suitor had second doubts about acquiring the Polk properties when it determined it didn’t need the city directory unit.

“There is a chance, since this is not a core business [for Equifax] that it will be spun off,” said one industry analyst. Another industry observer concurred, saying that with the plethora of lookup information available on the Internet, its viability was not what it once was. As for CD-ROM sales, much of the revenue for City Directory comes from the sale of ads. “Ads don’t translate well onto a CD-ROM,” said the observer.