DFIN who? NYSE-listed risk and compliance giant acquires eBrevia (and what that means)
When DFIN this week announced they had acquired AI-backed contract analytics platform eBrevia for $19.5m, I must admit that my first question was, who the hell are DFIN? My second was, what does this mean for eBrevia’s clients? Well, heads up, after speaking to DFIN, I like what I hear and so, apparently, do eBrevia’s clients.
DFIN is the recently rebranded name for Donnelley Financial Solutions, an end-to-end risk and compliance company that was spun out of RR Donnelley in 2016 and serves public and private companies and their legal advisers. I probably should know who they are but honestly, in the past two years the name hasn’t come up so one of us is doing something wrong.
Speaking to DFIN’s global capital markets president Craig Clay my first question was, “What exactly is it that you do?”
“We’re helping businesses to collaborate and understand the documents around their business and providing the solutions around that,” he explained.
DFIN partnered with eBrevia in 2015, invested in them in 2016 and have now acquired them, so perhaps no wonder Clay says: “It was a natural extension of the partnership to make the acquisition.”
Critically, eBrevia already plugs into DFIN’s bank-grade security virtual data room DFIN Venue, providing clients with in-depth insights into the copious pools of documents stored there.
“What do we do for lawyers, or what they are most likely using us for is a couple of things,” says Clay. “We have a virtual data room that stores documents, so in M&A we have a virtual deal room that is housing everything and provides the features and functionality to enable lawyers to share them.
“eBrevia is incorporated into that: a lawyer today that may have to open every contract and find the change of control clause now has eBrevia, which is trained to find a change of control clause and can review every contract in seconds. Then the lawyer is brought to exactly what they are looking for. It speeds things up dramatically.”
He adds: “We believe it will help attorneys speed their review up by 90%.”
Who do they see as competition? “We see none,” says Clay. “Venue is a virtual data room which in effect is an electronic filing cabinet. We have an amazing permission product that most don’t, but aside from that, it’s just a static repository. eBrevia has taken that room and means I can see everything in it without having to open and read it. It comes with prepopulated searches.”
The likes of Kira Systems and Seal Software may have a few words to add to this down the line but in the here and now, I want to know, has DFIN contacted eBrevia’s clients and what do they think of the acquisition? Recently there appears to be a lack of obvious focus on the end user in acquisitions, but Clay says: “I’ve talked with every major client – we went through a process to make sure we spoke to everybody.”
And their reactions? “It’s been awesome – they are dealing with DFIN in one area and eBrevia another – we have a lot of trust. We’re helping M&A corporate attorneys and they rely on us for regulatory advice and security. They know they are in a secure environment and we’re able to bring a brand glow to eBrevia.”
And here is where the acquisition becomes exciting: DFIN is not only plugging eBrevia into its existing offering but says it plans to accelerate eBrevia’s growth. “I believe we’re going to be able to provide greater velocity in their product roadmap,” Clay says. “We have a lot of things we have conceived of and are on the roadmap. In every Venue room you will be able to hover and see prepopulated things. You’ll be able to get insights and we’re going to take the whole analysis of documents to the next level and make it easy to provide insights.”
The trend towards large corporations snapping up AI startups was highlighted by CB Insights in 2017:
Many of those acquisitions have been driven by big players such as Google and Amazon and notably for the legal sector, Facebook in July acquired Bloomsbury AI – an Allen & Overy Fuse incubator startup that uses natural language processing to create virtual assistants.
I doubt we’ll see many more Facebook deals in the short term, but the ever-acquisitive Thomson Reuters (albeit perhaps not until it has finished its restructure) and LexisNexis are two obvious candidates to build out their growing AI businesses as and when the opportunity arises.
Meanwhile if in legal you hadn’t heard of DFIN, which is listed on the New York stock exchange, has over 3,500 employees and is well-known by many corporate lawyers, well, where the hell have you been?