All-Cash $301 million consolidation move by GB Group in identity verification market

It was announced on February 11, 2019 that the global leader in identity data intelligence, GB Group plc (AIM:GBG), acquired 100% of Atlanta, Georgia-based IDology, Inc. in a deal worth $301 million. Under the terms of the all-cash deal, up to $7.5 million will be held in escrow to cover any warranties, indemnities, or other obligations. Additionally, as part of total consideration, IDology will leave $1 million in cash on the balance sheet at transaction closing.

For 2018, IDology reported revenue and EBITDA of $38.2 million and $16.3 million, respectively, translating to an acquisition revenue multiple of 7.85x and EBITDA multiple of 18.4x.

IDology was founded in 2003 with the purpose of providing innovative digital identity verification and authentication solutions and tools. With its comprehensive ExpectID® offerings, IDology has provided streamlined onboarding, quick location and confirmation of identities, assurance of account identity and protection, and detection / deterrence of fraud to its more than 500 customers across a range of industries.

GB Group intends on keeping the IDology management team and employee base intact post-acquisition, and with synergies, expects the acquisition to be earnings accretive in the first financial year to March 2020. Chris Clark, CEO of GB Group, stated, “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 enables us to meet growing customer appetite for an identity verification provider with global capabilities and scale in key markets.”

This acquisition will be GB Group’s 11th and largest since 2011. GB Group will fund the acquisition through both a vendor placement as well as new bank facilities.

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Sources:

https://www.prnewswire.com/news-releases/atlanta-based-idology-to-be-acquired-by-gbg-for-300m-300793331.html

http://www.morningstar.co.uk/uk/news/AN_1549905697787419800/gb-group-raising-usd160-million-to-fund-usd300-million-idology-buy-(alliss).aspx

https://www.businesscloud.co.uk/news/listed-data-intelligence-specialist-makes-301m-us-deal