Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-165542

 

PROSPECTUS

 

 

248,000 Shares

 

DOLAN MEDIA COMPANY

 

COMMON STOCK

 

 

 

 

This prospectus relates to the offer and sale from time to time of up to 248,000 shares of our common stock by the selling stockholders identified in this prospectus. We issued these shares to the selling stockholders on December 31, 2009, as partial consideration when we purchased 71,230 common units of our majority-owned subsidiary, American Processing Company, LLC d/b/a NDeX (representing a 5.1% interest therein), from the selling stockholders under the terms of a common unit purchase agreement. We will not receive any proceeds from the sale of the shares by the selling stockholders.

 

Our common stock is listed on the New York Stock Exchange under the symbol “DM.” On March 15, 2010, the closing sales price of our common stock as reported on the New York Stock Exchange was $10.04 per share.

 

Investing in our common stock involves a number of risks. See “Risk Factors” on page 1 of this prospectus to read about factors you should carefully consider before buying shares of our common stock.

 

 

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

 

 

 

The date of this Prospectus is April 9, 2010

TABLE OF CONTENTS

 

 

 

 

On December 31, 2009, we issued 248,000 unregistered shares of our common stock to the selling stockholders as partial consideration when we purchased 71,230 common units of our majority-owned subsidiary, American Processing Company, LLC d/b/a NDeX (representing a 5.1% interest therein), from the selling stockholders pursuant to a common unit purchase agreement. Under the NDeX operating agreement, each of the selling stockholders had the right, until February 7, 2010, to require NDeX to repurchase their respective membership interest in NDeX at a price equal to 6.25 times NDeX’s trailing twelve month earnings before interest, taxes, depreciation and amortization less the aggregate amount of any interest bearing indebtedness for NDeX outstanding as of the repurchase date. The present value of the total consideration paid to the selling stockholders under the common unit purchase agreement approximated the price NDeX would have paid had the selling stockholders elected to exercise their repurchase right under the NDeX operating agreement. Under the common unit purchase agreement, we also granted the selling stockholders certain registration rights with respect to the shares. This prospectus is part of a registration statement that we have filed with the SEC to satisfy those registration rights. The registration statement uses a “shelf” registration process under which the selling stockholders may sell the shares from time to time in one or more transactions.

 

You should rely only on the information contained or incorporated by reference in this prospectus or in any supplement to this prospectus. We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. This prospectus is not an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing or incorporated by reference in this prospectus and any supplement is accurate as of its date only. Our business, financial condition, results of operations and prospects may have changed since that date.

 

In this prospectus, unless the context requires otherwise, the terms “company,” “we,” “us,” and “our” refer to Dolan Media Company and its consolidated subsidiaries.

 

We are a leading provider of necessary professional services and business information to the legal, financial and real estate sectors in the United States. We serve our customers through two complementary operating divisions: Professional Services and Business Information. Our Professional Services Division provides specialized outsourced services to the legal profession. Through our subsidiary, NDeX, we provide mortgage default processing services to eight law firms in seven states and also directly to mortgage lenders and loan servicers for residential real estate located in California. DiscoverReady, which we acquired on November 2, 2009, provides outsourced discovery management and document review services to major United States companies and their counsel. Counsel Press provides appellate services to law firms and attorneys nationwide. Our Business Information Division publishes business journals, court and commercial newspapers and other publications, operates web sites and e-mail notification systems and conducts a broad range of events for targeted professional audiences in each of the 21 geographic markets that it serves in the United States.

 

Our principal executive offices are located at 222 South Ninth Street, Suite 2300, Minneapolis, Minnesota 55402 and our telephone number is (612) 317-9420. Our web site address is www.dolanmedia.com. Information on our web site does not constitute a part of this prospectus.

 

For additional information concerning us, please refer to the documents incorporated by reference that are listed under the caption “Documents Incorporated by Reference.”

 

Investing in our common stock involves a high degree of risk. You should consider carefully the risks incorporated by reference herein that are described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009, as well as any applicable prospectus supplement and the reports we file from time to time with the SEC that are incorporated by reference in this prospectus. If any of the events described in such “Risk Factors” section(s) occurs or the risks described in such “Risk Factors” section(s) actually materialize, our business, financial condition, results of operations, cash flow or prospects could be materially adversely affected. In that event, the trading price of our common stock could decline and you may lose all or part of your investment.

 

This prospectus contains and/or incorporates by reference forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Forward-looking statements are statements such as those contained in projections, plans, objectives, estimates and anticipated future economic performance, as well as assumptions relating to any of the foregoing. We have based these forward-looking statements on our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “estimate,” “goal,” “continue” and similar expressions or terminology. These forward-looking statements are based on information currently available to us and are subject to a number of known and unknown risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include:

 

 

 

See “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009, as well as in our other reports filed from time to time with the SEC that are incorporated in this prospectus by reference and in any applicable prospectus supplement, for a description of these and other risks, uncertainties and factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

 

You should not place undue reliance on any forward-looking statements. Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this prospectus.

 

The selling stockholders are offering all of the shares of common stock covered by this prospectus. We will not receive any proceeds from the sales of these shares.

 

The following table provides information regarding the selling stockholders and the number of shares each selling stockholder is offering. We have prepared this table based on information furnished to us by, or on behalf of, the selling stockholders. Beneficial ownership is determined in accordance with Rule 13d-3 of the Exchange Act. Unless otherwise indicated in the footnotes to the table, the selling stockholders have sole voting and investment power with respect to all shares beneficially owned. In computing the percentage ownership of each selling stockholder, we have included shares of common stock subject to options that selling stockholder holds, to the extent such options are currently exercisable or may be exercisable within 60 days after March 15, 2010. The percentage ownership data is based on 30,323,663 shares of our common stock outstanding as of March 15, 2010.

 

This prospectus covers the resale of the shares issued to the selling stockholders in connection with our purchase of common units of our majority-owned subsidiary, American Processing Company, LLC d/b/a NDeX, from the selling stockholders on December 31, 2009. The shares are included in this prospectus pursuant to registration rights we granted to the selling stockholders in the common unit purchase agreement that we entered into in connection with the purchase. The shares may be sold from time to time by the selling stockholders, by those persons or entities to whom they transfer, donate, pledge or distribute their shares or by other successors in interest. The information regarding shares beneficially owned after this offering assumes each selling stockholder sells all of the shares being registered by us and does not acquire any additional shares of our common stock. The selling stockholders may sell less than all, including none, of the shares listed in the table. In addition, the shares listed below may be sold pursuant to this prospectus or in privately negotiated transactions. Accordingly, we cannot estimate the number of shares the selling stockholders will sell under this prospectus or when any such sales will occur.

 

Until January 4, 2010, each of the selling stockholders owned a membership interest in NDeX. We employ David A. Trott, one of our executive officers, as NDeX’s chairman and chief executive officer. We also employ Ellen Coon and Marcy J. Ford as executive vice presidents in NDeX’s Michigan operations. All of the selling stockholders are shareholders of the law firm, Trott & Trott, P.C., one of eight law firm customers with whom NDeX has entered an exclusive long-term services agreement to provide mortgage default processing services. In 2009, Trott & Trott was NDeX’s second largest law firm customer, accounting for 28.7% of our mortgage default processing services revenues. See also “Related Party Transactions and Policies — David A. Trott” in our 2010 proxy statement, which we intend to file with the SEC on or around April 5, 2010, for a description of certain other relationships between Mr. Trott, Trott & Trott and Mr. Trott’s other affiliated entities and us. The address of each of the selling stockholders is c/o Trott & Trott, P.C., 31440 Northwestern Highway, Farmington Hills, MI 48334-5422.

 

 

 

This prospectus also covers any additional shares of common stock that become issuable in connection with the shares being registered by reason of any stock dividend, stock split, recapitalization, or other similar transaction effected without the receipt of consideration that results in an increase in the number of our outstanding shares of common stock.

 

The shares covered by this prospectus may be offered, sold or distributed from time to time by the selling stockholders named in this prospectus or by their donees, pledgees, transferees or other successors in interest. The selling stockholders may sell their shares at market prices prevailing at the time of sale, at prices related to such prevailing market prices at the time of sale, at negotiated prices or at fixed prices, which may change from time to time. Each selling stockholder reserves the right to accept or reject, in whole or in part, any proposed purchase of shares, whether the purchase is to be made directly or through agents. We are not aware that any selling stockholder has entered into any arrangements with any underwriters or broker-dealers regarding the sale of his or her shares of common stock.

 

The selling stockholders may offer their shares at various times in one or more of the following transactions:

 

 

 

In addition, the selling stockholders also may sell their shares in private transactions or in accordance with Rule 144 under the Securities Act rather than under this prospectus.

 

Subject to compliance with our policies applicable to directors, officers and/or employees, one or more of the selling stockholders may pledge or grant a security interest in some or all of the shares owned by him or her. If a selling stockholder defaults in the performance of the secured obligations, the pledgees or secured parties may offer and sell the shares from time to time. A selling stockholder also may transfer and donate shares in other circumstances. If a selling stockholder donates or otherwise transfers its shares, the number of shares beneficially owned by him or her will decrease as and when it takes these actions. The plan of distribution for the shares offered and sold under this prospectus will otherwise remain unchanged, except that the transferees, pledgees, donees or other successors in interest will be selling stockholders for purposes of this prospectus or, if required, a supplement filed pursuant to Rule 424(b)(3) of the Securities Act to identify the recipient as a selling stockholder and disclose any other relevant information.

 

Subject to compliance with our policies applicable to directors, officers and/or employees, the selling stockholders also may engage in hedging transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers in connection with distributions of shares or otherwise. In those transactions, broker-dealers may engage in short sales of shares in the course of hedging the positions they assume with the selling stockholders. In addition, subject to compliance with our policies applicable to directors, officers and/or employees, the selling stockholders may sell shares short after the effective date of the registration statement of which this prospectus is a part and redeliver shares to close out such short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also enter into option or other transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers that require the delivery of shares to the broker-dealer. The broker-dealer may then resell or otherwise transfer such shares pursuant to this prospectus.

 

The selling stockholders may use brokers, dealers, underwriters or agents to sell their shares. The selling stockholders and any other person participating in a distribution of the shares covered by this prospectus may be deemed underwriters within the meaning of the Securities Act. The persons acting as brokers, dealers, underwriters or agents may receive compensation in the form of commissions, discounts or concessions. This compensation may be paid by the selling stockholders or the purchasers of the shares for whom such persons may act as agent, or to whom they may sell as principal, or both. In addition, the broker-dealers’ or their affiliates’ commissions, discounts or concessions, and any profits on the sale of shares by selling stockholders who are deemed to be underwriters, may be deemed underwriters’ compensation under the Securities Act. Neither we, nor any selling stockholder, can presently estimate the amount of that compensation. We will make copies of this prospectus and any supplements or amendments hereto available to each selling stockholder or any of its agents or broker-dealers for the purpose of satisfying the prospectus delivery requirements of the Securities Act.

 

To the extent required, upon being notified by a selling stockholder that any arrangement has been entered into with any agent, underwriter or broker-dealer for the sale of the shares of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by any agent, underwriter or broker-dealer, the name(s) of the selling stockholder and of the participating agent, underwriter or broker-dealer, the number of shares to be sold, the respective purchase prices and public offering prices, any applicable commissions or discounts, and other facts material to the transaction will be set forth in a supplement to this prospectus or a post-effective amendment to the registration statement of which this prospectus is a part, as appropriate.

 

The selling stockholders and any other person participating in a distribution of the shares covered by this prospectus will be subject to applicable provisions of the Exchange Act and the rules and regulations under the

Exchange Act, including Regulation M, which may limit the timing of purchases and sales of any of the shares by the selling stockholders and any other such person. Furthermore, under Regulation M, any person engaged in the distribution of the shares may not simultaneously engage in market-making activities with respect to the particular shares being distributed for certain periods prior to the commencement of or during that distribution. The foregoing may affect the marketability of the shares and the availability of any person or entity to engage in market-making activities with respect to the shares.

 

Under the securities laws of some states, to the extent applicable, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

 

We cannot assure you that any selling stockholder will sell any or all of his or her shares of common stock pursuant to this prospectus. Once sold pursuant to this prospectus, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.

 

We will bear the expenses relating to the registration of this offering. The selling stockholders will bear any underwriting discounts or commissions, brokerage fees or stock transfer taxes. The selling stockholders have agreed to indemnify us, our directors and our officers who sign the registration statement of which this prospectus is a part against certain liabilities arising in connection with this offering, including liabilities that could arise under the Securities Act. The selling stockholders may agree to indemnify any agent, underwriter or broker-dealer that participates in transactions involving the shares of common stock against certain liabilities, including liabilities arising under the Securities Act.

 

The validity of the issuance of the securities that are covered by this prospectus will be passed upon for us by Katten Muchin Rosenman LLP, Chicago, Illinois.

 

McGladrey & Pullen, LLP, an independent registered public accounting firm, has audited (1) the consolidated financial statements of Dolan Media Company and its subsidiaries as of December, 31, 2008 and 2009 and for the years ended December 31, 2007, 2008, and 2009; (2) the internal control over financial reporting of Dolan Media Company and its subsidiaries as of December 31, 2009; and (3) the consolidated financial statements of National Default Exchange Holdings, LP (and Predecessor) as of December 31, 2006 and 2007 and for the years ended December 31, 2005, 2006 and 2007, all incorporated by reference in this prospectus. These financial statements are incorporated by reference in reliance upon McGladrey & Pullen LLP’s reports dated March 8, 2010, and September 2, 2008, and upon the authority of such firm as experts in accounting and auditing. The financial statements of The Detroit Legal News Publishing, LLC as of December 31, 2008 and 2009, and for the years ended December 31, 2007, 2008 and 2009, have been audited by Baker Tilly Virchow Krause, LLP (f/k/a Virchow, Krause & Company, LLP), an independent registered public accounting firm, and are so incorporated by reference in reliance upon its report dated January 29, 2010, and upon the authority of such firm as experts in accounting and auditing.

 

 

We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read, without charge, and copy the documents we file at the SEC’s public reference room in Washington, D.C., at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public at no cost from the SEC’s web site at http://www.sec.gov. Our shares of common stock are listed on the New York Stock Exchange and you can inspect our reports, proxy statements and other information at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.

We have filed with the SEC a registration statement on Form S-3 under the Securities Act for the securities being offered by us. This prospectus does not contain all of the information in the registration statement and the exhibits and schedules that were filed with the registration statement. For further information with respect to us and our securities, we refer you to the registration statement and the exhibits that were filed with the registration statement. Statements contained or incorporated by reference in this prospectus about the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and we refer you to the full text of the contract or other document filed as an exhibit to the registration statement. Anyone may obtain the registration statement and its exhibits and schedules from the SEC.

 

The SEC allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document that we filed separately with the SEC. Information in this prospectus updates, and in some cases supersedes, information incorporated by reference from documents we have filed with the SEC prior to the date of this prospectus, while information that we file later with the SEC will automatically update and, in some cases, supersede the information contained or incorporated by reference in this prospectus.

 

The following documents that we have previously filed with the SEC are incorporated by reference into this prospectus:

 

 

In addition, all documents filed by us under Section 13(a), 13(c), 14, or 15(d) of the Exchange Act (1) after the date of the filing of this prospectus and prior to the SEC declaring the registration statement effective; and (2) after the date of this prospectus and prior to the sale of all of the securities covered by this prospectus are incorporated by reference into, and deemed a part of, this prospectus from the date of filing of those documents.

 

Copies of these filings are available free of charge on our web site, www.dolanmedia.com. In addition, if you request, either orally or in writing, we will provide you with a copy of any or all documents that are incorporated by reference. These documents will be provided to you free of charge, but will not contain any exhibits, unless those exhibits are specifically incorporated by reference into a document. You should direct any requests for documents to Dolan Media Company, Attention: Corporate Secretary, 222 South Ninth Street, Suite 2300, Minneapolis, Minnesota 55402, telephone: (612) 317-9420.