Dec 3 - Standard & Poor's Ratings Services said today that its corporate
credit and other ratings on Atlanta-based Equifax Inc. (BBB+/Stable/A-2) remain
unchanged following the company's recent announcement that it has entered into
definitive asset purchase agreement with Computer Sciences Corp.
(BBB/Negative/A-2) to acquire its credit services business assets and operations
for approximately $1 billion. The outlook is stable.
CSC has been Equifax's largest credit affiliate, and Equifax has been
processing CSC's credit information since 1988. When completed, the
transaction will solidify Equifax's position in the U.S. credit services
market, and we expect it to be accretive to earnings in 2013. We expect
Equifax to fund the transaction with a combination of existing credit
facilities, additional debt financing, and available cash. While we expect pro
forma leverage to modestly exceed 2x in fiscal 2012, we also expect the
company to maintain its conservative financial policies and moderate share
repurchases, and use free cash flow to reduce leverage to no more than 2x
Our ratings on Equifax are based on the company's "satisfactory" business risk
profile, distinguished by its strong position in the global credit management
and reporting industry and its consistent profit margins, and its
"intermediate" financial profile, supported by its solid free cash flow
generation and conservative financial policies. In addition, the stable
outlook reflects Equifax's large recurring revenue base and "adequate"