ChoicePoint Inc. fetches high purchase price

ATLANTA - ChoicePoint Inc., a 1997 spin-off of credit agency Equifax Inc., is being acquired by the parent of LexisNexis Group in a cash deal worth $3.6 billion. That is a big premium for a firm that has weathered an embarrassing breach of its database, federal investigations, and a stock-trading probe of its top two executives.

The purchase price amounts to $50 a share, a 49 percent premium to ChoicePoint's closing stock price of $33.66 Wednesday. ChoicePoint had 71.5 million shares outstanding as of its last reporting date of Oct. 31.

Reed Elsevier P.L.C., a London-based educational publisher and parent of the LexisNexis information service, also will assume roughly $500 million to $600 million in ChoicePoint debt, the company said yesterday. Company representatives differed on the exact debt figure.

ChoicePoint, which collects, sells access to, and analyzes the personal information of consumers, will be combined with LexisNexis' risk group.

Personnel decisions, including what role ChoicePoint chief executive officer Derek Smith will play in the group, also have not been determined, said Jim Peck, the chief of LexisNexis' risk group.

ChoicePoint shares soared $14.61, more than 43 percent, to close at $48.27 yesterday.

The acquisition, subject to ChoicePoint shareholder and regulatory approval, is expected to close in the summer.

ChoicePoint did not return repeated calls yesterday seeking comment. One spokesman sent an e-mail referring all inquiries to Reed Elsevier officials.

ChoicePoint disclosed in February 2005 that thieves posing as small-business customers gained access to its database, possibly compromising the personal information of 163,000 Americans.

In January 2006, the company agreed to pay $15 million to settle Federal Trade Commission charges that its security and record-handling procedures violated consumers' privacy rights.

Last month, ChoicePoint said the Securities and Exchange Commission closed its investigation into stock sales involving the company's top two executives without recommending any charges.

The SEC was looking into trades by CEO Smith and chief operating officer Doug Curling that netted them $16.6 million in profit after the company learned about the breach in September 2004, but before it was publicized.