Last week, Dun & Bradstreet acquired long-time partner Bisnode, greatly strengthening its position in Europe. Bisnode provides them with direct access to regional and multi-national customers in the Nordic region, Eastern Europe, and D-A-CH (Germany, Austria, Switzerland).
Dun & Bradstreet described the execution risk as low to medium as they know the company well, have established relationships with Bisnode, and Bisnode is “very familiar” with Dun & Bradstreet’s products and solutions. The deal was also structured as a mix of debt and equity so as not to increase Dun & Bradstreet’s financial leverage.
One the announcement call, Dun & Bradstreet did not discuss Bisnode products, but one asset that Dun & Bradstreet will likely operationalize quickly is Bisnode’s file of 40 million GDPR-compliant business contacts across 21 European countries.
Dun & Bradstreet anticipates the deal will close in January 2021 subject to standard regulatory reviews. The acquisition will add around 2,000 headcount to Dun & Bradstreet.
Bisnode revenue will be included in Dun & Bradstreet’s international division and will be broken out for the first year after acquisition.
Jabbour indicated that Dun & Bradstreet is strategically reviewing its World Wide Network of partners to “look for ways to improve the commercial arrangements that we have or make them more relevant.” Options include purchasing the partner, ending the partnership arrangement and picking a new partner, or renegotiating the relationship.
The market appeared pleased with the transaction as Dun & Bradstreet’s stock price increased 8.53% last Thursday following the announcement and analyst call.
[Part I] Last week, Dun & Bradstreet announced the acquisition of Bisnode Business Information Group for $818 million. The deal greatly strengthens their European presence across 18 countries, including the Nordics, D-A-CH, and Eastern Europe.
When the deal closes, Dun & Bradstreet will “rapidly introduce” its credit and supplier risk management solutions, along with its sales and marketing services, to clients across Europe, “providing vital business intelligence to help them compete, thrive and grow.”
Ratos AB CEO Jonas Wiström noted that Bisnode’s focus has “improved customer offering, stability, and profitability,” but that ongoing growth “requires that Bisnode participate in the consolidation that is taking place in the increasingly global market for data and analytics.”
Over the past four years, Bisnode has doubled its operating margin from 7% to 14%. In H1 2020, eleven to the twelve companies within the Bisnode group improved their earnings.
“We are convinced that Dun & Bradstreet is the best possible partner to lead this consolidation. The combined strengths of our assets and capabilities will greatly serve our respective clients, increase competitiveness and position Dun & Bradstreet/Bisnode for long-term growth. I look forward to joining the Dun & Bradstreet International Strategic Advisory Board.”
Ratos AB CEO Jonas Wiström
Ratos’ strategy is to hold companies that are or can become market leaders, but Bisnode, as a standalone organization, is not in a position to build a market-leading position in data and analytics.
Dun & Bradstreet offers a suite of advanced B2B sales and marketing solutions that can be cross-sold into the Bisnode customer base. Cross-sale opportunities include D&B Lattice (a customer data platform), D&B Analytics, D&B ABM Platform, D&B Audience Solutions (Visitor Intelligence, webforms, and programmatic advertising), D&B Optimizer (DaaS enrichment and validation), D&B Direct (API), and D&B Hoovers.
Dun & Bradstreet anticipates operational efficiencies from migrating Bisnode customers off legacy platforms onto Dun & Bradstreet solutions, more efficient data sourcing and curation, and leveraging global resources to make all functions more efficient.
Owning the full revenue stream of Dun & Bradstreet products increases the profitability of localizing services due to the removal of revenue shares and the availability of local sales and support teams. The D-A-CH region would likely be the initial target for localization. For example, D&B Hoovers has Nordic, German, and Austrian financials and corporate linkages, but the UI and event triggers are only in English.
“When you get into some of those 18 countries within the Bisnode territory, there wasn’t that level of localization” as compared to the UK, said Jabbour. “So there is a fantastic opportunity to bring our modern platforms [and] modern APIs and make small tweaks from a localization perspective.”
“The products that we have rolled out have been very successful,” continued Jabbour. Dun & Bradstreet expects continued success and greater market focus on the Bisnode markets. During the pandemic, Dun & Bradstreet’s product sales by Bisnode grew “nicely.”
“The closer we can get to the headquarters of any business and really share our value proposition [and] ways [that] we can help that business grow their revenues, improve their margins, and remain compliant,” the greater the opportunity. “We have a lot of confidence in our go-to-market approach, and this simplifies it because now there is one instead of two companies involved in serving that large enterprise on a global basis,” observed Jabbour.
Another advantage of direct ownership is Dun & Bradstreet is no longer looking to influence the sales team but will have direct control over incentive and compensation plans.
Dun & Bradstreet, which has long relied on global partnerships to address the sales, marketing, and risk evaluation needs of its multi-national customers, is expanding its presence in Europe with the acquisition of Bisnode Business Information Group. Bisnode is 70% owned by private equity firm Ratos and 30% by Bonnier.
The $818 million acquisition, which is 75% cash and 25% common stock, expands Dun & Bradstreet’s presence in Scandinavia, Central Europe, and D-A-CH (Germany, Austria, and Switzerland). The acquisition provides direct ownership in eighteen “strategic territories in Europe” and “provides opportunities for scale by leveraging existing Dun & Bradstreet product portfolio, data supply chain, and technology infrastructure.”
Upon close, Ratos will hold a 1% stake in Dun & Bradstreet.
Bisnode’s Belgian operations were not included in the deal.
The deal adds 110,000 Bisnode customers to Dun & Bradstreet’s customer base and provides direct access to an additional fifty Global 500 companies headquartered in the Bisnode countries. The deal provides direct ownership of 33 million business records (around nine percent of the WorldBase file). It also allows for the direct sale of Dun & Bradstreet products into major European markets.
Bisnode currently has an annual revenue of around $400 million, net income of $28 million, and adjusted EBITDA of $70 million.
Bisnode has been a Dun & Bradstreet reseller since 2003. Dun & Bradstreet’s solutions account for 33% of Bisnode revenue, and revenue has been “growing in a solid manner for the past few years” in the Bisnode territories. The remaining Bisnode revenue consists of proprietary in-market solutions.
“We are pleased to bring Bisnode into the Dun & Bradstreet family following a nearly two-decade strategic alliance. The powerful combination of our data, analytics, and innovative solutions, paired with Bisnode’s deep client relationships and expertise in European markets, will provide our existing and future clients with vital business intelligence to support their own growth ambitions. We look forward to welcoming the Bisnode team to Dun & Bradstreet and to working together to grow the global business.”
Dun & Bradstreet CEO Anthony Jabbour
When the deal closes, Dun & Bradstreet will create an International Strategic Advisory Board headed by Neeraj Sahai, President of Dun & Bradstreet International. Ratos AB CEO Jonas Wiström will be joining the Advisory Board.
“Integrating our two leading organizations provides significant opportunity to deliver a broader product set to a substantially larger global client base. As the international business community becomes increasingly data-driven, we look forward to combining our teams to unlock further potential, drive innovation, and deliver solutions that are tuned to client and market needs,” said Sahai.