Chicago-Based Firm Swoops On 'Mini-Experian'

A Chicago-based private equity firm was on Tuesday closing in on a deal to buy Callcredit, one of Britain's leading credit-checking agencies.

Sky News understands that GTCR, which owns a number of information services and technology companies, is close to entering exclusive talks to buy Yorkshire-based Callcredit.

Vitruvian Partners, the current owner, has been hoping to attract a price of around £400m for Callcredit, which it has owned since 2009.

It remains possible that either Charterhouse, a private equity firm, or Bertelsmann, the German conglomerate, could yet trump GTCR with a higher offer.

Callcredit, which has been dubbed a "mini-Experian (Other OTC: EXPGF - news) " because of its resemblance to the FTSE100 credit referencing giant, employs around 800 people at sites across the UK.

It competes with Experian and Equifax (NYSE: EFX - news) in the credit referencing market, which is worth billions of pounds a year.

The move towards a deal with GTCR comes weeks after bidders raised concerns about a looming crackdown on the payday lending market, which accounts for a significant chunk of Callcredit's revenues.

Archbishop of Canterbury Justin Welby and politicians including Chancellor George Osborne and Labour leader Ed Miliband have called for tough restrictions on payday lenders' business practices in recent months.

The exact proportion of Callcredit's earnings derived from the sector is not disclosed by the company although a person close to the auction suggested that it could be in the region of 10%.

Previously part of Skipton Building Society, Callcredit has seen sales and profits grow rapidly since the business changed hands, with the business buoyed by growing demand for greater volumes of consumer credit data.

Callcredit has urged the Government to make greater use of technology in a bid to reduce the multi-billion pound bill for benefit fraud which taxpayers are forced to foot each year.

Jefferies, the investment bank handling the sale, and a spokesman for Vitruvian declined to comment.

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