Madison Dearborn Opts For TransUnion IPO

Chicago buyout shop 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 told sister news service Reuters.

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. In another example, auto supplier Cooper-Standard Holdings Inc. ended a sale process in October 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.

Chicago-based Madison Dearborn bought a 51 percent 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.

(Soyoung Kim is a correspondent for Reuters in New York; additional reporting by Paritosh Bansal.)