Big funds circle but $1.5bn should thin the herd

Some of the world’s largest buyout funds will be putting the finishing touches on first-round bids for Illion that are due Friday, with groups including Kohlberg Kravis Roberts, TPG Capital, The Carlyle Group, Brookfield and Blackstone all thought to be featuring among the list of eager buyers.

In the early stages of the contest, the credit check company Illion is thought to be popular, but many question how many parties will remain in the competition further down the track when the company has a $1.5 billion-plus asking price.

Market analysts believe the only sort of group that can pay such a lofty price is a trade buyer or an infrastructure investor, and some question whether any will want to pursue the Archer Capital-owned company.

The most likely trade buyer potentially hanging around the hoop so far is Experian, but the expectations that it might pay top dollar are low.

Illion generates between $70 million and $100m in annual earnings before interest, tax, depreciation and amortisation, so a price of $1.5bn or more would mean the sale would be at a lofty multiple. However, a private equity firm might pay up if they have plenty of funds to put to work or mandates to bulk up in technology investments.

Working on the sale of the business that once comprised the Australian operations of Dun and Bradstreet are Houlihan Lokey and Citi.

The sale should prove to be a coup for Archer, which paid $220m for the operation in 2015.

When Illion was bought, about two thirds of the operation was consumer-related, and the plan has been to drive more of a business-to-business focus.