Online security specialist announces £233m acquisition of US target

GB Group, the Chester-based global identity data intelligence specialist, is raising £160m through a share placing to buy a US company in a deal valued at £233m.

In an announcement to the Stock Exchange earlier this evening (February 11), the group said it was buying IDology, an Atlanta-based private company providing identity verification and fraud detection services.

GBG said it will fund the deal through the placing, and approximately £84m in borrowings from new bank facilities.

It said it would position the group as “a global provider of identity verification, fraud prevention and location intelligence services”.

For the financial year ended December 31, 2018, IDology generated revenues of $38.2m and EBITDA of $16.3m, representing a 42% EBITDA margin.

IDology has more than 500 customers and derives in excess of 70% of its revenue from financial services-related businesses which will further enhance GBG’s strength in this vertical.

The placing is being conducted through an accelerated book build process being managed jointly by Peel Hunt and Investec Bank, and the book build opened with immediate effect after this evening’s announcement.

The directors and senior management of GBG intend to subscribe for placing shares with a value amounting in aggregate to approximately £800,000.

Chris Clark, GBG’s chief executive, said: “I am delighted to announce the acquisition of IDology.

“With attractive organic growth, significant synergies and a strong cultural alignment, this is a high-quality addition to GBG.

“The combination of IDology and GBG will enable us to meet the growing customer appetite for an identity verification provider with global capabilities and scale in key markets.”

He added: “We are excited by the compelling strategic rationale behind this acquisition.

“It enables GBG to quickly expand further into North America, a key growth territory for the business.

“We have already built an exciting domestic presence in the US with Loqate, our location proposition, and IDology now gives us an excellent platform for both identity verification and fraud prevention.

“The board and I look forward to the future success that we anticipate that our combined business can deliver.”

John Dancu, IDology’s president and chief executive, said: “For the past 15 years IDology has provided multi-layered identity verification.

“With the combination of IDology and GBG we intend to innovate, delivering exceptional solutions for our customers, focusing on driving customer revenue and preventing fraud.

“With GBG’s expertise in global data, we are all excited to expand our solutions and our trusted consortium network for customers across the globe.”