Dun & Bradstreet buys First Research

'Makes a ton of sense,' Raleigh company's co-founder says

The Dun & Bradstreet Corp. has acquired First Research, a Raleigh company that compiles industry research for salespeople, for up to $26.5 million.

The deal, effective Tuesday, means opportunities for First Research's 800 customers and its 42 employees, said Bobby Martin, the company's co-founder and president.

The eight-year-old privately held company gains the resources and clout of D&B, a public company that provides information and technology to help its customers reduce credit risk, manage business relationships and collect receivables. D&B had sales of $1.5 billion in 2006.

The deal also provides a substantial return for Martin, the company's only investor. Co-founder Ingo Winzer and three other executives, Audrey Forrester, Will Brawley and Lee Demby, will also benefit, as they hold stock in the company.

With little outside funding since its start in 1999, First Research grew to $6.5 million in revenue last year by tapping surging demand for industry-specific research, Martin said.

First Research provides lengthy industry profiles as well as brief executive summaries that help salespeople understand the issues affecting their customers' businesses.

Its products cover 600 segments in the accounting, banking, insurance, technology, consulting, financial services and outsourcing industries.

D&B subsidiary Hoover's provides insight into individual companies and executives.

Together, the products are a powerful combination, said Paul Pellman, interim president of Hoover's, which will operate in conjunction with First Research.

"The complement of those together creates a one-plus-one-equals-three opportunity for our customers," Pellman said. "The value really increases by having them together."

The companies also share a similar culture, Martin said. All of First Research's employees and executives, 38 of whom work in North Carolina, will remain with the company, he said.

D&B paid $22.5 million in cash for First Research. It will pay up to $4 million more based on the company's financial performance.

Pellman and Martin said they began talking about pulling the companies together as partners about a year ago. Six to nine months ago, the discussions progressed to considering a merger.

"It was a match made in heaven," Martin said. "It just makes a ton of sense."