Reed Elsevier, an London-based information provider, will acquire ChoicePoint Inc., a risk mitigation product company, for $4 billion.
The acquisition is expected to close this summer.
ChoicePoint, founded in 1997 as a spin-off from credit bureau Equifax, has grown in revenue from $400 million to approximately $1 billion, said Reed.
This acquisition comes after ChoicePoint agreed to pay $10 million to settle pending litigation resulting from a breach of confidential consumer information in which criminals, posing as customers, stole the personal information of 163,000 people. This case goes back several years.
Last summer, ChoicePoint settled with the attorneys general of 44 states for failing to guard the privacy and security of personal consumer information, in an accord they said goes beyond the firm’s Jan. 2006 settlement with the Federal Trade Commission (Direct Newsline, June 1, 2007).
Specifically, the Alpharetta, GA firm agreed to:
*Make significant ongoing changes in its credentialing process for clients that handle sensitive personal information.
*Not misrepresent the extent to which it maintains and protects the security and integrity of personal information.
*Maintain procedures to protect its reports from unauthorized, fraudulent or unauthorized access.
*Perform audits to make sure it properly identifies individuals and businesses requesting information.
*Pay $500,000 to all the states.
States making this agreement were: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin and the District of Columbia.
In Jan. 2006, the FTC levied a $10 million fine — the largest in its history, the agency said — against ChoicePoint. The Commission also required the company to set aside $5 million for consumer redress. The breaches were first reported publicly in Feb. 2005.
