Exclusive: Madison Dearborn Won’t Sell TransUnion, Planning for IPO: Sources

(Reuters) – Private equity firm Madison Dearborn Partners has decided against selling TransUnion and will pursue a public offering for the credit reporting firm as originally planned, sources familiar with the matter said.

A sale of the business, which competes with firms such as Experian Plc and Equifax Inc., was expected to fetch more than $2 billion, but the bidders could not meet Madison Dearborn’s price expectations, sources said.

Private equity firms Carlyle Group, Bain Capital and Advent International were competing for the business, sources previously said.

The pulled auction is the latest sign that financing markets remain tight for private equity acquisitions. A higher interest rate and less financing hurt the returns buyout shops can make on deals, lowering the price they are willing to offer.

Earlier this week, auto supplier Cooper-Standard Holdings Inc. also ended a sale process that attracted private equity bidders, citing market conditions.

Madison Dearborn, which bought a majority stake in TransUnion last year from Chicago’s Pritzker family, plans to list the business in the first quarter, one of the sources said.

TransUnion said in July it planned to raise up to $325 million in an IPO, but also started a sale process as the IPO market was effectively shut because of geopolitical and economic uncertainty.

Madison Dearborn declined to comment.

The IPO market also remains tough, although some companies are beginning to test the waters. Daily deals site Groupon is moving ahead with its plans for an IPO, with the offering expected to price on Nov. 3.

Chicago-based Madison Dearborn bought a 51% stake in TransUnion last year from the Pritzkers, one of the wealthiest families in the United States.

The Pritzkers have been selling assets following a 2001 settlement agreement, under which 11 heirs set a plan to break up the family fortune.

In 2006, the family sold smokeless tobacco company Conwood to Reynolds American Inc. for $3.5 billion.

That was followed in 2007 by the sale of 60 percent of manufacturing and services group Marmon Holdings Inc to Warren Buffett’s Berkshire Hathaway Inc. for $4.5 billion.

Late in 2009, the family took Hyatt Hotels Corp. public.

Earlier this year, the Pritzkers sold a controlling interest in Triton Container International Ltd. to Warburg Pincus LLC and Vestar Capital Partners for about $1 billion.

By Soyoung Kim and Paritosh Bansal, Reuters

(Reporting by Paritosh Bansal and Soyoung Kim in New York; editing by Robert MacMillan and Andre Grenon)