Vault.com Acquired by Veronis Suhler Stevenson Private Equity Firm

We can probably file this blog entry in the “this isn’t quite news but it is still interesting” category. A few weeks ago, private equity firm Veronis Suhler Stevenson announced a majority investment in on-line job board, Vault.com. My congratulations to both parties. I’ve long been a fan of Vault for the quality and quantity of employment-related content that they produce. We’ve also been around for about the same period of time. We went live 12 years ago. They followed a year later.
Just two short years ago, Vault laid off one third of its staff (25 people) in an effort to become profitable. I did some research on-line but wasn’t surprised when I wasn’t able to turn up any type of reliable profitability measurements for Vault. Is it profitable today? Probably. But it is certain that today, with its revenues reported to be $9.6 million, it is valued at $60 to $85 million. If so, that’s a pretty rich revenue multiplier of 6.25 to 8.9 times as compared to some other niche job boards. For example, Dice Holdings, Inc., the owner of information technology niche job board Dice.com, is trading at 6.59 its annual revenues. All things being equal, a public traded company usually trades at a premium over privately held companies because investors prefer to be liquid.

Some might argue that the premium paid to the owners of Vault may reflect its strong revenue growth rate of 30 to 50 percent per year but Dice is growing at 79 percent year-over-year. I suspect that the premium is related to profitability. Dice has revenues of $113 million, gross profit of $79 million, and earnings before interest and taxes of $42 million. Those are all very healthy looking. But scratch the surface just a bit and you’re confronted with negative net income of $106 million. So for every dollar that Dice takes in, they’re paying out almost two in expenses. Ouch.
If my suspicion is correct and the owners of Vault received a premium for their shares due to their financials being healthier than Dice’s, then that bodes well for the stock market in general and the job board industry in particular as investors such as Veronis are seeing the value in firms which have real traffic, revenues, and profits.