Equifax Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

ACQUISITIONS AND INVESTMENTS

ACQUISITIONS AND INVESTMENTS

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

2023 Acquisitions and Investments. In the first quarter of 2023, the Company acquired a company in Canada, within the International operating segment.

Acquisition of Boa Vista Serviços

On August 7, 2023, we acquired the remaining interest of our investment in Boa Vista Serviços S.A. ("BVS"), a consumer and commercial credit information company in Brazil, within the International operating segment for approximately $510 million in cash, 2,171,615 shares of Equifax do Brasil, and 479,725 shares of Equifax Inc. common stock (the "Acquisition"). We previously owned a 10% investment in BVS.

The following table summarizes the fair value of consideration exchanged to complete the acquisition of BVS:


Fair value of consideration	Amount
	(In millions)

Cash transferred (1)	$	509.7
Equifax do Brasil common shares issued (2)	176.4
Equifax Brazilian Depositary Receipts ("Equifax BDRs") issued (3)	94.6
Fair value of 10% investment	88.9
Total value of consideration	$	869.6

(1) The cash transferred represents the actual cash transferred as part of the transaction. The cash portion of the consideration was funded primarily with borrowings under our commercial paper program.

(2) The fair value of the 2,171,615 Equifax do Brasil common shares issued was determined based on the offer price for the outstanding BVS shares.

(3) One Equifax BDR represents one share of Equifax Inc. common stock. The fair value of the 479,725 Equifax BDRs issued was determined based on the share price of Equifax Inc. as of August 7, 2023.

The Company accounted for this acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the acquisition. The purchase price allocation for the acquisition is not yet finalized and open areas relate to measurement of intangible assets, noncontrolling interest, income taxes, working capital and other reserves, as well as the assignment of goodwill recognized in the transaction. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.

The preliminary valuation of acquired assets and assumed liabilities at the date of the acquisition, include the following:


Net assets acquired:	Amount
	(In millions)
Cash and cash equivalents	$	239.5
Trade accounts receivable and other current assets	36.2
Other assets, net	48.6
Purchased intangible assets (1)	241.9

Goodwill (2)	407.2
Total assets acquired	973.4



Total liabilities assumed	(103.8)

Net assets acquired	$	869.6

(1) Purchased intangible assets are further disaggregated in the following table.

(2) The goodwill related to BVS is included in the Latin America reporting unit within our International reportable segment.

The goodwill recognized in connection with the transaction was due to expanded growth opportunities from expanding geographically into Brazil, and from the opportunity to create new or enhanced product offerings, as well as cost savings from improved technology and the elimination of duplicative activities that are not recognized as assets apart from goodwill.


Purchased intangible assets	Amount		Weighted-average useful life
	(In millions)		(In years)
Customer relationships	$	172.4	10.0
Purchased data files	64.3		15.0

Trade names and other intangible assets	5.2		2.4
Total acquired definite-lived intangibles	$	241.9	11.2

Redeemable Noncontrolling Interest

As part of the merger consideration issued to complete the acquisition of BVS, we issued shares of one of our subsidiaries, Equifax do Brasil, thus resulting in a noncontrolling interest. We recognized the noncontrolling interest at fair value at the date of acquisition. These shares were issued with specific rights allowing the holders to sell the shares back to Equifax, at fair value during specified future time periods starting at the fifth anniversary and only when certain conditions exist. Additionally, the shareholder agreements provide Equifax the right to buy the shares back at fair value at future dates beginning after the tenth anniversary of the acquisition, however Equifax is not required to execute this right at any point.

We determined the noncontrolling interest shareholder rights meet the requirements to be considered redeemable. Therefore we have classified the noncontrolling interest outside of permanent equity on our consolidated balance sheet.

Currently, the noncontrolling interest is not redeemable but it is probable that it will become redeemable in the future. Therefore we will recognize changes in the redemption value as of each balance sheet date.

2022 Acquisitions and Investments. In the first quarter of 2022, the Company acquired 100% of Efficient Hire, a provider of cloud recruiting, onboarding and human resources management solutions, within the Workforce Solutions operating segment, and Data Crédito, a consumer credit reporting agency in the Dominican Republic, within the International operating segment.

In the third quarter of 2022, the Company acquired 100% of LawLogix, a leading provider of cloud-based I-9 software and immigration case management software, within the Workforce Solutions operating segment, and Midigator, a provider of post-transaction fraud mitigation solutions, within the U.S. Information Solutions business segment.