Vault.com, which is growing at 30% to 50% a year, is selling a majority stake to media bankers Veronis Suhler Stevenson.
The 11-year-old job-posting website, which also provides surveys and other information about colleges and employers, generates most of its revenue from advertising.
While financial terms of the deal were not released, the deal is estimated between $60 million to $85 million.
This investment signals the emergence of two important points of view, according to Peter Weddle, publisher of WEDDLES.com.
“First, online employment services are increasingly recognized as one of the most successful sectors of e-commerce and a line of business with significant upside potential,” he says.
“Second, although it is possible to enter this sector by building an enterprise from the ground up, the more efficient strategy is often the acquisition of all or a stake in a site that has already established a powerful brand,” says Weddle.
Weddle notes that Vault.com is not the first site being “cherry-picked” in this industry, pointing to the successful acquisition of Mediabistro.com in July.
“This is proof positive that online employment services are no longer the Sleepy Hollow of Internet commerce,” adds Weddle.
Expect more growth at Vault.com through acquisitions, which the Wall Street Journal calls “a mainstay of Veronis’s investing strategy.”
The newspaper adds that “the play for New York-based Veronis may be to nurture Vault for a few years until it can be sold to a major media or information company. These companies are hungry for online investing opportunities, and are often willing to pay high prices for the access.”
Veronis Suhler’s Managing Director Trent Hickman calls the coming wave of baby-boomer retirement a “huge challenge” for corporate America, which Vault.com wants to tackle.
New CEO at Vault
Media executive Erik Sorenson, the former president of MSNBC, will become chief executive officer of the company. Vault.com’s founders and senior executives will remain significant shareholders and part of the management team led by Sorenson.
“Career choices and career development are critical to people of all ages, especially those between the ages of 18 and 34. Vault’s content for this audience is unsurpassed, making it a tremendous platform for building a world-wide, world-class digital media business benefiting consumers, recruiters, and advertisers,” said Sorenson, in a statement.
Vault.com was founded in 1996 by Samer Hamadeh, his brother Hussam Hamadeh, and Mark Oldman.
Vault.com had raised around $19 million in venture capital funding during 1999 and 2000, according to Private Equity Hub, from Esther Dyson, Rockefeller & Co., Deutsche Bank, American Lawyer Media, Ingram Industries, Hollinger Capital, and the New York City Investment Fund. VSS acquired all of those shares as part of the buyout.
“We are pleased to join with VSS to generate liquidity for our shareholders and position Vault for significant global expansion,” said Vault’s three founders, in a statement.
“VSS’s unique mix of long-term focus, media experience, and M&A competence will allow us to capitalize on the burgeoning trend of career and admissions prep and create a company for the generations.”
The private investment firm’s first foray into the recruiting sector was securing a financial stake in PreVisor, a provider of online pre-employment testing and assessment solutions. Its second effort, in September 2006, was when it acquired TMP Worldwide’s recruitment advertising operations for $45 million.