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.