Dice S-1: Read the Full IPO Prospectus (2007)

Prospectus Summary

PROSPECTUS SUMMARY This summary highlights all material information about us and this offering, but does not contain all of the information that you should consider before investing in our common stock. You should read this entire prospectus carefully, including the “Risk Factors” and the consolidated financial statements and related notes before investing. This prospectus includes forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements.” Except as the context otherwise requires, references in this prospectus to the “Company,” “we,” “our” or “us” are to Dice Holdings, Inc. and its subsidiaries.

Except as the context otherwise requires, references to information being “pro forma” or “on a pro forma basis” means such information is presented after giving effect to the transactions with eFinancialGroup Limited and the other transactions described in our unaudited pro forma condensed combined financial statements contained herein. See “Unaudited Pro Forma Combined Consolidated Statement of Operations.”

Our Company

We are a leading provider of specialized career websites for select professional communities. We target employment categories in which there is a scarcity of highly skilled, highly qualified professionals relative to market demand. Our career websites serve as online marketplaces where employers and recruiters find and recruit prospective employees, and where professionals find relevant job opportunities and information to further their careers. Each of our career websites offers job listings, content, career development and recruiting services tailored to the specific needs of the professional community that it serves. Our largest websites by revenue are Dice.com, the leading career website in the United States for technology professionals, and eFinancialCareers.com, the leading global career website for capital markets and financial services professionals.

We believe that as recruiting activities migrate online and the global workforce becomes increasingly specialized, both professionals and employers are demanding access to industry and occupation-specific online recruiting services and career content. Professionals use our websites at no cost to manage their careers by posting their resumes and searching our large and growing collections of job postings. Our customers pay us to post job listings and to access our databases of resumes of highly experienced and qualified professionals. The majority of our revenues are derived from customers who purchase our recruitment packages, which are available through monthly or longer-term contractual arrangements and allow customers to both post job listings and search our databases of resumes.

The Dice service has operated for 16 years and eFinancialCareers.com has operated for almost seven years. We believe that our long operating history has enabled us to build brand recognition and a critical mass of both customers and professionals, which has given us a distinct competitive advantage in our employment categories. As the breadth and number of job listings and skilled professionals using our websites has grown, the increase of each has fostered the growth of the other, further enhancing the value and scale of our marketplaces.

We operate the following websites, each of which focuses on different career sectors or geographic regions:

We also operate Targeted Job Fairs, a leading producer and host of career fairs and open houses focused primarily on technology and security-cleared candidates in the United States.

We have experienced significant revenue growth since 2004. We generated revenues of $87.1 million in 2006, up from $35.8 million in 2004, representing a compound annual growth rate, or “CAGR,” of 56%, and we grew our operating income and cash flow from operations from $3.9 million and $14.1 million to $15.1 million and $41.0 million, representing a CAGR of 97% and 70%, respectively, over the same period.

Our Industry

We operate in the online employment advertising segment of the broader market for staffing and employment services. The worldwide market for staffing and employment advertising is large and shifting online at a rapid pace. International Data Corporation, or “IDC,” estimates that employment advertising spending, comprising online job boards and recruitment classified ads, in the U.S. market was $8.6 billion in 2006, and forecasts an increasing share of that spending to be garnered by online recruitment advertising.

We believe that the overall demand for employment advertising and recruiting and career development products and services has significant growth potential. Over the next several years, the aging labor force of the United States is expected to lead to a labor supply-demand imbalance as baby-boomers retire. According to the U.S. Bureau of Labor Statistics, a shortfall of over two million workers in the labor force is forecast by 2014.

We also believe that certain industries that employ highly skilled and highly paid professionals will experience particularly strong demand for effective recruiting solutions due to the scarcity of such professionals. According to the U.S. Bureau of Labor Statistics, for instance, five of the 12 fastest-growing occupations in the United States during the period from 2004 to 2014 are expected to be in technology fields. We believe that international economies show similar trends, with an aging labor force in Europe, and shortages of skilled professionals to meet the demand of growing economies in Asia.

We believe that the market for employment advertising is shifting online due to:

While generalist job boards have improved the recruiting process compared to traditional offline alternatives, specialized career websites offer job listings, content and services tailored to the specific needs of the communities they serve. Moreover, because specialized career websites attract communities of professionals from specific industries, employers can reach a more targeted and more qualified pool of candidates. We believe this leads to a better recruitment experience for both customers and professionals.

Our Value Proposition

We have become a leading provider of specialized career websites for select professional communities by providing unique benefits to professionals and our customers. Our specialized career websites provide professionals with quick and easy access to job listings that are relevant and meet their industry-specific criteria, and provide our customers with pools of hard-to-find, highly qualified professional talent. By providing deep databases of professionals to our customers and a large number of employment opportunities for professionals, we encourage the use of our websites and continue to attract customers to our services. We believe these factors have helped us to achieve a critical mass of both customers and professionals, contributing to the attractiveness and efficiency of our online marketplaces.

Benefits to Professionals

Access to a large number of relevant job postings. Our career websites provide a large number of job postings for technology and engineering, accounting and finance, capital markets and financial services, and U.S. government security-clearance positions. In addition, the specialized focus of our career websites benefits professionals by helping to ensure that the job opportunities posted by our customers are relevant and attractive to them.

Compelling user experience. We have designed each of our career websites with the specific needs of our target audiences of professionals in mind. We believe that our customized search engines and audience-tailored websites are efficient and relevant, easy to use and valuable to our users, helping us build a loyal and engaged audience.

Targeted career development services and tools. We provide professionals with targeted career development services and tools including content, decision support tools and relevant industry news. We believe our career development services and tools benefit the professionals who use our career websites by providing them with relevant information to manage and enhance their careers, and also increase the engagement of professionals with our sites.

Benefits to our Customers

Unique pools of qualified professionals. We seek to improve the efficiency of the recruiting process for our customers by providing quick and easy access to large and up-to-date pools of highly qualified and hard to reach professionals. Moreover, because the communities of professionals who visit our websites are highly skilled and specialized within specific industries, we believe our customers reach a more targeted and qualified pool of candidates than through generalist sites.

Efficient and targeted candidate searches. Our career websites are easy to use and our search engines are designed so that our customers can search our resume databases quickly to find professionals who meet specified criteria. We believe that this approach results in a faster and more efficient search for candidates, helps our customers improve the efficiency of their recruiting efforts and increases customer preference for our career solutions relative to our competitors.

High-quality customer support. We are able to differentiate ourselves from our competitors by providing extensive ongoing support to our customers. We personalize our customer support efforts by providing our customers with representatives that are knowledgeable about the professional communities we serve and the skill sets of professionals in those communities.

Our Strategy

Our goal is to be the leading global network of specialized career websites for select professional communities. Our primary objective is to maximize the potential of our career websites. To achieve these goals, we are pursuing the following strategies:

Recent Developments

On October 31, 2006, we acquired all of the outstanding capital stock of eFinancialGroup Limited, or “eFinancialGroup.” eFinancialGroup operated the career websites eFinancialCareers.com, which targets global capital markets and financial services professionals and employers, and JobsintheMoney.com, which targets the financial and accounting job market in the United States, and a financial publishing business, eFinancialNews. As consideration for the acquisition, we paid the stockholders of eFinancialGroup, which we refer to as the “eFG Stockholders,” £56.5 million (or approximately $106.3 million at the exchange rate in effect on October 31, 2006) in cash and issued 7,872 shares of our Series A convertible preferred stock valued at $25.2 million. Immediately after the acquisition, we sold eFinancialNews back to a group of eFinancialGroup’s former stockholders for £22.0 million (or approximately $41.6 million in cash at the exchange rate in effect on October 31, 2006). We refer to the acquisition of eFinancialGroup and the disposition of eFinancialNews as the “eFinancialGroup Acquisition.”

On March 21, 2007, we entered into an amended and restated credit facility, or the “Amended and Restated Credit Facility,” that refinanced and extended the maturity of our outstanding indebtedness under our prior credit facility, increased our borrowing capacity and amended certain of the restrictive covenants to provide us greater financial and operating flexibility. Our Amended and Restated Credit Facility provides for a $125 million term loan and a $75 million revolving facility, each with a five year maturity. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Amended and Restated Credit Facility.” We used a portion of the proceeds from the Amended and Restated Credit Facility to pay a dividend of approximately $107.9 million in the aggregate, or $900.11 per share, to holders of our common stock and Series A convertible preferred stock and to make a payment of $4.6 million in the aggregate, or $900.11 per vested option, to holders of vested stock options in lieu of a dividend on March 23, 2007. We refer to this dividend as the “2007 Dividend.” See “Dividend Policy.” In this prospectus, we refer to the borrowings under our Amended and Restated Credit Facility and the 2007 Dividend as the “2007 Financing.” We intend to use the proceeds to us from this offering to pay down amounts outstanding under the Amended and Restated Credit Facility and for working capital and general corporate purposes. See “Use of Proceeds.”

Conversion and Stock Split

Prior to this offering, we had common stock and Series A convertible preferred stock outstanding. In accordance with the terms of the certificate of designation for our Series A convertible preferred stock, the holders of 66²/3% of all outstanding Series A convertible preferred stock have the right at any time to require that all the outstanding shares of Series A convertible preferred stock be converted into an equal number of shares of our common stock. Prior to the consummation of this offering, our principal stockholders, which consist of certain affiliates of General Atlantic LLC and certain affiliates of Quadrangle Group LLC and who in the aggregate own more than 66²/3% of our outstanding Series A convertible preferred stock, will require that all of the outstanding shares of Series A convertible preferred stock be converted into an equal number of shares of our common stock. As a result, after this offering, we will only have common stock outstanding. We refer to this conversion of the Series A convertible preferred stock into common stock as the “Conversion.” Prior to the consummation of this offering, we will also increase our total authorized number of shares of capital stock, make certain changes to our charter documents and effect a to stock split, which we refer to as the “Stock Split.” Unless otherwise noted, all information in this prospectus gives effect to the Conversion and the Stock Split. See “Certain Relationships and Related Transactions—Conversion and Stock Split.”

We refer to our General Atlantic, LLC investment fund stockholders as the “General Atlantic Stockholders” and to our Quadrangle Group LLC investment fund stockholders as the “Quadrangle Stockholders.” We refer to the General Atlantic Stockholders and the Quadrangle Stockholders collectively as the “Principal Stockholders.”

Risks Associated With Our Business

Our business is subject to numerous risks, which are highlighted in the section entitled “Risk Factors.” These risks represent challenges to the successful implementation of our strategy and the growth of our business. Some of these risks are:

For further discussion of these and other risks you should consider before making an investment in our common stock, see the section entitled “Risk Factors” beginning on page 11.

Corporate History and Information

We were incorporated in Delaware on June 28, 2005, but through our predecessors have been in the technology recruiting and career development business since 1991. Our corporate headquarters is located at 3 Park Avenue, New York, NY 10016, and our telephone number is (212) 725-6550. Our website is http://about.dice.com. Information contained on our website does not constitute a part of this prospectus.

On August 31, 2005, the Principal Stockholders acquired all of our outstanding equity in connection with our acquisition of Dice Inc. from its stockholders, which we refer to as the “2005 Acquisition.” Currently, the Principal Stockholders beneficially own in the aggregate approximately 92% of the outstanding shares of our Series A convertible preferred stock and all of our outstanding common stock. Upon completion of this offering, the Principal Stockholders will beneficially own approximately shares of our common stock or % ( shares of our common stock, or %, if the underwriters exercise their over-allotment option in full).

Our Principal Stockholders

General Atlantic LLC, or “General Atlantic,” is a leading global private equity firm providing capital for innovative companies where information technology or intellectual property is a key driver of growth. The firm was founded in 1980 and has approximately $12 billion in capital under management. General Atlantic has invested in over 160 companies, including us. General Atlantic has offices in Greenwich, New York, Palo Alto, London, Düsseldorf, Mumbai and Hong Kong.

Quadrangle Group LLC, or “Quadrangle,” is a private investment firm with over $5 billion in assets under management. Quadrangle invests in media and communications companies through separate private and public investment strategies and in debt securities across all industries through a debt investment program. Quadrangle Capital Partners, its private equity business, invests in media and communications companies in partnership with superior management and where it believes its experience, relationships and capital can create long-term value. Quadrangle has offices in New York and London.

The Offering

We will not receive any proceeds from the sale of our common stock by the selling stockholders.

See “Use of Proceeds.”

The number of shares of our common stock outstanding after this offering excludes options to purchase shares of common stock that are currently outstanding under the Dice Holdings, Inc. 2005 Omnibus Stock Plan (the “2005 Stock Plan”) and options to purchase shares that are to be granted upon consummation of this offering under the Dice Holdings, Inc. 2007 Equity Award Plan (the “2007 Equity Plan”). Unless we indicate otherwise, all information in this prospectus assumes that the underwriters do not exercise their option to purchase up to shares of our common stock to cover over-allotments.

Unless we indicate otherwise, all information in this prospectus assumes an initial public offering price of $ per share, the midpoint of the estimated public offering price range set forth on the cover page of this prospectus.

Summary Historical and Pro Forma Combined Consolidated Financial and Other Data

The information set forth below should be read in conjunction with “Capitalization,” “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Combined Consolidated Statement of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

The consolidated statements of operations data for the year ended December 31, 2004 and eight months ended August 31, 2005 have been derived from the audited consolidated financial statements and related notes of Dice Inc. (“Predecessor”), which are included elsewhere in this prospectus. The consolidated statements of operations data for the four months ended December 31, 2005 and the year ended December 31, 2006 and the consolidated balance sheet data as of December 31, 2006 have been derived from the audited consolidated financial statements and related notes of Dice Holdings, Inc. (“Successor”), which are included elsewhere in this prospectus.

The following table also presents summary pro forma combined consolidated financial data for the fiscal year ended December 31, 2006, that gives effect to the eFinancialGroup Acquisition as if it had occurred at the beginning of that period. Such data has been derived from our unaudited pro forma combined consolidated statement of operations included elsewhere in this prospectus.

The financial data includes the impact of various acquisitions from the date of acquisition.

the cost build-up approach which determines fair value by estimating the costs related to fulfilling the obligation plus a normal profit margin. The estimated costs to fulfill our deferred revenue obligation in connection with the 2005 Acquisition were based on our expected future costs to fulfill our obligation to our customers. As a result, we recorded an adjustment to reduce the carrying value of deferred revenue by $6.0 million, to $10.1 million. The reduction negatively impacted revenues by $3.9 million and $2.1 million for the periods ended December 31, 2005 and 2006, respectively.

We consider EBITDA and Adjusted EBITDA, as defined above, to be important indicators to investors because they provide information related to our ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and fund future growth as well as to monitor compliance with financial covenants. We present EBITDA and Adjusted EBITDA as supplemental performance measures because we believe that these measures provide our board of directors, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), the age and book depreciation of fixed assets (affecting relative depreciation expense), acquisitions (affecting amortization expense) and compensation plans (affecting stock compensation expense) and to estimate our value. We present this discussion of Adjusted EBITDA because covenants in our Amended and Restated Credit Facility contain ratios based on this measure. If our Adjusted EBITDA were to decline below certain levels, covenants in our Amended and Restated Credit Facility that are based on Adjusted EBITDA may be violated and could cause, among other things, an inability to incur further indebtedness and in certain circumstances a default or mandatory prepayment under our Amended and Restated Credit Facility. EBITDA and Adjusted EBITDA are not measurements of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flow from operating activities as a measure of our profitability or liquidity. We understand that although EBITDA and Adjusted EBITDA are frequently used by securities analysts, lenders and others in their evaluation of companies, EBITDA and Adjusted EBITDA have limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

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