Experian raises profile by buying LowerMyBills

The credit-checking division of retail group GUS, owner of Argos and Homebase, has entered a £200m deal to buy a privately owned online service that helps consumers find cheap phone services and loans.

Experian, the US offshoot of GUS, is paying $330m (£173m) for www.LowerMyBills.com, with an extra sum - of up to $50m - payable over the next two years, depending on performance.

The California-based website is Experian's fourth internet-based acquisition and its biggest deal for seven years. LowerMyBills.com, founded in 1999 by its chief executive, Matt Coffin, uses information entered by consumers to match them with the best financial deals in sectors ranging from internet access to debt consolidation loans and health insurance. LowerMyBills is then paid for every lead passed on to each lender.

The market for these services now stands at about $1bn a year and is growing at 30% a year. Experian estimates that the percentage of mortgages originating online will treble between 2003 and 2008.

In the year to March, LowerMyBills generated pro-forma sales of $120m and an operating profit of $26m.

The company has offices in Santa Monica and 176 employees. It claims to have helped 500,000 consumers save more than £172m on their monthly bills.

Don Robert, who took over as chief executive of Experian last month, said: "We will now assist consumers in making the most cost-effective financial services decisions, while also providing our lender clients with high-quality leads for new borrowers. The strategic fit could not be better."

The Experian business is growing fast. It recently reported its third successive year of double-digit growth. The company, which originally specialised in credit-checking services for mortgage lenders, is moving into direct-to-consumer businesses. It said the LowerMyBills deal would enhance earnings in the first year.

GUS is considering a spin-off of the unit, which holds credit information on more than 200 million people, as part of a strategic review of the firm.

Analysts said the deal made a demerger more likely. The shares climbed 13.5p to 860p.