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Dolan Media seeks to raise up to $200 million: getting ready for acquisitions?

Acquisition-hungry Dolan Media Co. (NYSE: DM) may be positioning itself to make further acquisitions of media and business-services companies in the current recession-battered market.

The Minneapolis-based company is seeking to raise as much as $200 million through a combination of common stock, preferred stock, debt or warrants in what is referred to as a shelf registration with the Securities and Exchange Commission. (It is called that because a company can ‘pull the filing off the shelf’ quickly when it needs to raise capital.) 

While the company indicated it does not have immediate plans or commitments that would require raising capital, James P. Dolan, chairman and chief executive officer, said in a press release that the filing was a strategic move intended to provide flexibility.

“We decided to file the shelf registration statement now so that, after the SEC declares the registration statement effective, we would be able to offer and sell our securities when we need to raise capital, including when needed for acquisitions. Once effective, we would be able to conduct one or more public offerings, from time to time, to sell up to $200 million of our securities to satisfy our capital needs.”

Unless it receives a waiver from creditors, the company will be required to apply 50 percent of the net proceeds from the sale of any equity securities under this shelf registration to the repayment of debt outstanding under its $200 million credit facility, according to the company filing.

Currently, the company has $146 million in outstanding long-term debt and an additional $13 million in acquired debt.

Dolan Media was founded with the acquisition of Finance and Commerce  in the Twin Cities in 1992. Since then, the company has expanded through acquisitions into business professional services and business information for the legal, financial and real estate sectors across the United States. It also has acquired a portfolio of specialized business publications and websites.

 Other media properties in Minnesota include Minnesota Lawyer and Politics in Minnesota. The company’s delinquent-mortgage processing business has been fueling its growth recently. In its most recent acquisition, announced this fall, the company acquired an 85 percent stake for an undisclosed sum in DiscoverReady LLC, of New York, which provides document review services for large corporations and lawyers involved in litigation or regulatory issues.

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