Dun & Bradstreet to go private in $5.38bn deal

October 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

October 2018 Issue

Data and analytics firm Dun & Bradstreet is to be acquired by a group of investors including CC Capital, Cannae Holdings and funds affiliated with Thomas H. Lee Partners LP, in a deal which, including existing debt and pension obligations of $1.5bn, is valued at $6.9bn.

The transaction is expected to close in six months, subject to shareholder approval, regulatory clearances and other customary closing conditions. Dun & Bradstreet shareholders will receive $145 in cash for each common share they hold. The price represents an 18 percent premium to the company’s stock price the day before the transaction was announced and a premium of around 30 percent over Dun & Bradstreet’s closing share price of $111.63 on 12 February 2018, the last day of trading prior to Dun & Bradstreet’s announcement of a strategic review and an indication of its willingness to consider all options for value creation.

The deal will be financed through a combination of committed equity financing provided by the investor group, as well as debt financing from Bank of America Merrill Lynch, Citigroup and RBC Capital Markets.

“Today’s announcement is the culmination of a thoughtful and comprehensive review of the value creation opportunities available to the company as part of a full portfolio and business assessment and exploration of strategic alternatives with multiple financial sponsors,” said Thomas J. Manning, who will lead the company as chief executive through the transaction. “As a result of this process, the Dun & Bradstreet board of directors unanimously determined that this all-cash transaction with the Investor Group is in the best interest of our shareholders and our Company,” said Mr Manning.

James N. Fernandez, a Dun &Bradstreet director since 2004 and lead director since February 2018, will serve as chairman of the board on an interim basis.

“Dun & Bradstreet is a high-quality business with a 177-year history of serving its global customer base,” said Chinh Chu, senior managing director and founder of CC Capital. “We look forward to working with our partners and Dun & Bradstreet’s talented team to unlock the immense potential within this venerable company.”

“In an increasingly data-driven world, Dun & Bradstreet’s insight-driven business model and interconnectivity across industries has positioned the company for continued success,” said William P. Foley II, chairman of Cannae Holdings. “We are excited to grow the company, increase operating efficiencies and improve the Dun & Bradstreet customer experience by providing enhanced business solutions.”

“We are honoured to partner with an established leader in the commercial data and insight industry with a long history of excellence in helping customers and partners around the globe,” said Thomas Hagerty, managing director at THL. “As a private company, Dun & Bradstreet will be well positioned to reinvigorate growth and create increased value for all stakeholders.”

The deal does include a 45 day ‘go shop’ window in which an alternative buyer may emerge while the PE consortium completes its due diligence. Should Dun & Bradstreet receive a superior offer, it has the right to terminate the agreement with the CC Capital consortium.

Dun & Bradstreet was founded in the 1800s and holds around 300 million business records in its cloud service. The company, which was listed on the New York Stock Exchange, will become privately held after the closing of the deal.

Shortly after announcing the sale, Dun & Bradstreet announced that it had missed its second quarter 2018 results. Adjusted earnings per share came in at $1.40, missing the consensus mark by 10 cents, and remained flat year-over-year. Total revenues of $439.6m outpaced the consensus estimate by $37m and increased 8 percent year-on-year. The company recorded adjusted revenues of $394.4m, a 4 percent year-on-year decline.

Richard Summerfield