ClearScore is part of Blenheim Chalcot’s roster of successful FinTech companies, which include Liberis, Oakbrook, Modulr, Salary Finance, Openwrks and, most recently, mortgage market disruptor Dynamo. Through Blenheim Chalcot’s venture building model, ClearScore went from first hire to product launch in six months and signed up their millionth customer within a year.
ClearScore provides free access to credit reports and scores and introduces consumers to personal financial products and offers which are best suited to their individual circumstances. These include offers for credit cards, loans, mortgages, car loans and other services. To date, ClearScore has enrolled over 6 million members in the UK through its free membership model.
“In acquiring ClearScore, we will take another important step in our strategy to extend the services we provide to UK consumers,” Brian Cassin, Chief Executive Officer of Experian said.
“Our goal is to provide more choice and greater convenience to individuals who want access to personal financial products at the best prices, while also making it easier for credit providers to offer better, more tailored offers to consumers. We look forward to welcoming the ClearScore team to Experian and to including the ClearScore brand as part of our broader offer.”
The acquisition of ClearScore will combine two well-known, high growth UK consumer brands, both of which will be retained. It will also bring together two businesses with complementary assets and skills to improve outcomes for consumers. ClearScore will benefit from Experian’s broad data assets, analytical capabilities and distribution, while Experian will benefit from ClearScore’s skill in developing services which are appealing and easy to use, as well as an agile culture accomplished at keeping its membership engaged. In addition, ClearScore will help to accelerate Experian’s ambitions to provide services to consumers internationally, having recently launched a service in South Africa.
The purchase price is GBP£275m (US$385m)*, with an additional earnout potential contingent on achieving future financial performance. The transaction is subject to regulatory approval by the Competition & Markets Authority and the Financial Conduct Authority, as well as other customary closing conditions, and will be funded from Experian’s existing committed bank facilities. It is expected to close later in 2018 and to be accretive to Benchmark earnings in the first full fiscal year of ownership.
ClearScore’s services are provided to consumers for free and it generates revenue through referral fees paid by lenders and other service providers on its site. ClearScore has experienced rapid growth as the type of credit products and features offered through its site have increased and as membership has grown.
For calendar year 2018, ClearScore is on track to generate revenue of c. US$55m, an increase of c.50% on 2017, with strong growth continuing in calendar 2019.
The EBIT contribution to Experian is expected to be neutral in calendar 2018, rising to a c.US$20m contribution in calendar 2019, before integration costs.
EBIT progression is expected to be underpinned by significant cost synergies on integration with the Experian business, amounting to approximately US$25m per annum.
Experian expect to record one-off integration expenses of US$20m to integrate the business and realise the planned synergies.