Merging Credit-Analysis Technologies

Two pioneers in the use of data mining for credit analysis applications are combining forces. Fair, Isaac & Co. Inc., which develops credit scoring and statistics-based predictive technology for consumer credit companies, plans to acquire HNC Software Inc., a developer of credit fraud-detection software, in a stock deal valued at $810 million.

HNC makes software to spot suspicious buying that suggests credit-card fraud, and the San Diego company also makes software for monitoring merchant transactions, looking for fraud in the financial services, health-care, and telecommunications industries. Fair, Isaac of San Rafael, Calif., says combining the companies' technologies will create a broad line of business-analysis applications.

The deal is expected to close in the third quarter, pending regulatory approval and approval by each company's stockholders. Once the acquisition is complete, HNC stockholders will own approximately 35% of Fair, Isaac. Fair, Isaac (FIC-NYSE) reported sales of $329.1 million last year, while HNC (HNCS-Nasdaq) reported sales of $226.7 million.