K1 acquires Litera and Sackett Group to add to Microsystems and XRef stable
Off the back of its acquisition of Microsystems and XRef in September 2016, Los Angeles-headquartered private equity house K1 has acquired Litéra and the Sackett Group in a move that will significantly shake up the document creation and review market.
K1 has invested a total of $100m on the four acquisitions to create what it describes as the world’s only end-to-end document solution for lawyers and corporate counsel.
The acquisition, driven by K1’s objective to achieve consolidation and innovation in the sector, was finalised on Friday 11 August.
Speaking to Legal IT Insider, Litera’s president Paul Domnick, Microsystems president Avaneesh Marwaha, Litera co-founder and chief commercial officer Raina Massand, and Sackett Group founder Linda Sackett said the acquisition will not bring any immediate change to clients and the companies will not make any immediate decisions on how to integrate their products. The Sackett Group will be folded into the combined entity in Q3.
There also has notably been no immediate decision on whether the Microsystems or Litera name will be retained, with the companies planning to gain feedback from the market.
Speaking to Legal IT Insider, Domnick said: “We’ve been talking to K1 for the best part of the year. Their track record in enterprise software was interesting to us and one of the reasons that we decided to go for this transaction. In terms of integration, the most interesting thing is that we have a lot of client overlap – we’ve all been in this market for 20 years – but there is less of a product overlap.
“The ability to get in front of clients to give them what they need and offer vendor consolidation gives us a fantastic opportunity to innovate across the document lifecycle,” he added.
Deepak Massand, co-founder and public figure head of Litera passed away in September 2015, leaving many to speculate on the company’s future, however Domnick said: “We are coming at this from a position of strength. Until this year, 2016 was our fastest year of growth but 2017 will beat it. Already what’s inked will make 2017 our best year ever.”
Marwaha added: “This really is a merger of two strong companies. We’re going to be taking a very diligent approach and will be hyper focussed on customers. There will be zero impact in 2017 as we look for synergies in our products.”
Massand said: “This is partly the result of customer feedback – we’re in no rush to make decisions or cause upheaval.”
In terms of the potentially thorny name change, Marwaha added: “We will decide at the right time. All three brands have founders who started something strong and it would not be fair to see things done inappropriately.”
When it comes to the new management structure there are also currently more questions than answers and Domnick said: “Both Microsystems and Litera will have their management in tact and will move with K1 to build a new team this year. We will eventually unify the management structure.”
Sackett, whose goal is to withdraw from the business after helping with the transition, said: “I started my company in 1990 and while my team will transition to Microsystems my clients won’t notice any change. So far the feedback has been positive and this is tremendous growth for my team.”
In the UK, where XRef is based, Microsystems has around 10 members of staff and Litera has four and there are plans for further growth. The combined company will have 250 members of staff and six offices.
Reacting to the news, Dan Surowiec, Global CIO of Baker McKenzie said: “We have been using solutions from Litéra, Microsystems, XRef and The Sackett Group for years. They have all invested the time and energy required to understand our firm, our working practices and our challenges,” comments.
“By bringing these brands together we are excited about the opportunities for even greater innovation alongside the efficiencies of working with one vendor to address our document lifecycle needs.” Baker McKenzie has deployed these solutions to assist in creating, comparing, proofreading, repairing, cleaning and collaborating safely on documents to better serve its clients.”