Experian agreed to acquire 41st Parameter in 2013 to strengthen its fraud-prevention and identity-authentication business. The US$324 million deal brought in device-identification technology that could help banks and online businesses assess whether a web transaction came from a familiar or suspicious device, supporting fraud checks with less friction for legitimate customers.
What was 41st Parameter?
The 41st Parameter, Inc. was a US provider of device identification and web-fraud detection services. Its technology recognized devices used in online activity and supplied that signal to risk-based authentication systems. Rather than treating every transaction as equally risky, a business could use device intelligence as one input when deciding whether to allow a transaction, ask for additional verification or investigate further.
The company served financial institutions, ecommerce merchants, online travel businesses and digital-media companies. Its technology was used in several fraud scenarios:
- New-account fraud: device information could help flag suspicious account applications.
- Card-not-present transactions: merchants and financial institutions could use it to assess online payment risk.
- Account takeover: a device signal could help identify activity inconsistent with a customer’s established account use.
Device identification was a risk signal, not proof of a person’s identity. Its value was in helping businesses make authentication decisions alongside other information.
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Why did Experian buy 41st Parameter?
Experian said the acquisition would expand its fraud-prevention capabilities and complement its existing fraud-detection and online-authentication products. It saw an opportunity to combine 41st Parameter’s device identification with its identity-management products, and to offer the technology to Experian’s existing customers.
That combination addressed a practical tension in online finance: stronger checks can deter fraud, but excessive challenges can inconvenience genuine customers. Experian said the capabilities could help clients complete web transactions “quickly and securely,” reducing fraud losses while authenticating consumers with minimal intrusion. Damiano Cracolici, then Experian India’s Head of Decision Analytics, described the purchase as part of the company’s effort to provide a broad set of fraud-detection and identity-authentication capabilities.
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How much did Experian pay?
Experian plc reported an aggregate purchase price of US$324 million in 2013. That figure included US$14 million in limited two-year earn-out provisions, so the earn-out was part of the reported aggregate price rather than an additional amount to add to it.
The acquisition announcement also presented 41st Parameter as a growing business with recurring customer relationships. Experian reported that license contracts were typically two to three years, client renewal rates exceeded 95%, and revenue had grown at more than 40% compound annually over the prior two years. Experian expected approximately US$26 million in revenue for calendar 2013, with more than 95% already booked and contracted. These were figures and expectations reported by Experian in 2013, not later audited performance measures in this account.
When did the acquisition close?
Experian announced a definitive agreement on 1 October 2013. Its 2014 financial statements state that the transaction closed on 1 October 2013.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What happened to 41st Parameter after the deal?
Experian incorporated the acquired capability into its Fraud and ID business. By 2015, Experian described FraudNet device intelligence as operating alongside Precise ID and Experian identity data. That points to the strategic purpose of the deal: device information became one component in a broader set of identity and fraud tools, rather than the only basis for a decision about whether an online customer was legitimate.
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Alan Naumann, 41st Parameter’s president and CEO, said the companies could combine their teams to deliver solutions to their mutual clients around the world. Experian’s later description of the capability within Fraud and ID shows the direction of integration, though it does not establish that every original 41st Parameter product or customer contract continued unchanged.
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