Dun & Bradstreet (DNB) to Acquire Dun & Bradstreet Credibility in $350M Deal
Dun & Bradstreet (NYSE: DNB) and Dun & Bradstreet Credibility Corporation today announced the formation of a new division, Dun & Bradstreet Emerging Businesses, a combination of Dun & Bradstreet Credibility Corporation’s leading technology and data solutions with Dun & Bradstreet’s small and mid-sized business assets. The new division will create a powerful team representing Dun & Bradstreet in the marketplace and will leverage Dun & Bradstreet Credibility Corporation’s established track record and suite of products to serve the unique needs of emerging business customers. The transaction has been approved by both boards of directors and is expected to close during May of 2015, pending regulatory approval.
“We are excited about this transaction which we expect will further enable Dun & Bradstreet’s overall growth strategy, and quickly accelerate our presence and reach in the small and emerging business arena,” said Bob Carrigan, President, CEO and Director, Dun & Bradstreet. “In a short amount of time, Dun & Bradstreet Credibility has become the market leader in this area, turning its small business assets into an impressive and thriving business experiencing double-digit growth. This is an investment in our strategy that will transform the way we go to market, capture market share, and expand Dun & Bradstreet’s capabilities to deliver more sophisticated solutions to the diverse needs of this critical business sector.”
Tapping the strength of Dun & Bradstreet Credibility Corporation’s management team and business model, the combined expertise, technology assets and processes will improve the ways in which Dun & Bradstreet leverages existing products, develops new products, and incorporates leading B2B and business contact data into products.
“Dun & Bradstreet has the largest commercial database, and with this combination will add a valuable patent portfolio and technology intended to fuel future product development that serves the needs of companies of all sizes,” said Jeff Stibel, Chairman and CEO, Dun & Bradstreet Credibility Corporation. “By combining two highly successful and complementary teams within one global company, we will create significant value for our customers.”
After deal close, Stibel will assume the role of Vice Chairman, Dun & Bradstreet. His responsibilities will include heading this new division, running Hoover’s products globally, and working with senior leaders on strategy and business development worldwide.
“We have great respect for the strong business that Dun & Bradstreet Credibility management and its employees operate to serve emerging businesses,” said Josh Peirez, Chief Operating Officer, Dun & Bradstreet, to whom Dun & Bradstreet Emerging Businesses will report. “Small and mid-size businesses are the backbone of the American economy, and we are squarely focused on supporting the success of those businesses and the relationships they have with their customers, suppliers, and partners. The combination of our teams to create Dun & Bradstreet Emerging Businesses creates tremendous opportunity for our employees to deliver innovative products and services to the almost 28 million small and mid-size businesses in the U.S. and support the company’s ongoing global growth efforts.”
Dun & Bradstreet will purchase Dun & Bradstreet Credibility Corporation for $320 million in cash plus an earnout of up to $30 million if certain performance milestones are met through 2018. Since 2010, Dun & Bradstreet Credibility Corporation has more than doubled their revenue and in 2014 generated $135 million of revenue with an adjusted EBITDA margin of close to 20%. The acquisition is expected to contribute approximately 4% of revenue growth to Dun & Bradstreet’s 2015 results and is expected to increase 2015 operating income by 2%, both before deal-related expenses including amortization, deal costs, and the impact of purchase accounting on deferred revenue, and including planned integration expenses. The deal is expected to be neutral to 2015 adjusted earnings per share (EPS), due to interest expense associated with the expected debt financing for the transaction, and neutral to 2015 free cash flow. The transaction is expected to become accretive to Dun & Bradstreet’s adjusted EPS beginning in 2016. For a discussion of the impact that the acquisition of Dun & Bradstreet Credibility Corporation has on Dun & Bradstreet’s 2015 guidance, see our Current Report on Form 8-K filed separately today.