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D&B Vacuums Hoover's for $117M

Looking to expand its database of business information for the research services it sells, Murray Hill, N.J.-based D&B has shelled out $117 million in cash for Hoover's Inc. .

Hoover's, which has headquarters in Austin, Texas, runs an Internet database of business information that it sells to public and private companies. The acquisition by D&B (formerly Dun & Bradstreet), valued at $7 per share in cash, is expected to close in the first quarter of 2003.

The company's Hoover's Online site accounts for the majority of its revenues though subscriptions to its editorial database. It is usually the first place to look for basic and detailed information on corporations worldwide.

Subscriptions account for more than 80 percent of Hoover's revenue and D&B executives believe it is a "natural fit" for the market it operates in.

Hoover's has been making a big push into the small business market and D&B CEO Allan Loren believes it can build on this strength. "Hoover's is a natural fit for D&B because its strengths align with four of our areas of strategic focus. Its core subscription business has a track record of growth and the potential for much more," Loren added.

"Hoover's has made solid inroads with small business customers, a segment that we have just begun to tap. And finally, with the majority of its revenue delivered online, Hoover's business model is consistent with our aspiration to have an important presence on the Web," he said.

About 40 percent of Hoover's sales come from the small business market and D&B is projecting that revenue to nearly double by 2005.

When the deal closes, Jeffrey Tarr keeps his job as CEO of the Hoover's business line, which will be run though D&B's e-business solutions group.

Company officials could not be reached to discuss specific plans for the merger of the two companies. Hoover's employees just over 200 at offices in Texas, San Francisco and New York and it is likely some staff cuts will be made once the integration of the two companies is complete.

Hoover's styles itself as the 'homepage of the business world' and makes money from the sale of access to proprietary business information via the Web, wireless devices and co-branding agreements with more than 30 other services.

D&B operates in a somewhat similar market, selling and integrates business information and statistics into products built by software makers like Oracle and SAP. D&B's boasts a database of statistics on more than 70 million companies in 200 countries.

Hoover's, which went public in a $45.5 million IPO in 1999, offers both free and for-pay content and also publishes books and CD-ROMs.

New York-based AOL Time Warner owns about 17 percent of Hoovers while Media General had a 15 percent stake.