Listed as one of Deloitte’s 2015 Technology Fast 500 companies, LDiscovery has been acquired by major private equity house The Carlyle Group and ‘disruptor’ investor group Revolution Growth alongside LDiscovery’s management. Financial terms have not been disclosed but the Washington Post has reported the investment to be in the region of $150m.
Carlyle is understood to have bought a majority stake in LDiscovery, which provides a full range of information discovery and governance solutions to law firms, corporations and government agencies.
Led by founder and CEO Chris Weiler, LDiscovery will now also be chaired by Daniel Akerson, the former chairman and chief executive of General Motors and former head of Carlyle’s flagship global buyout group.
Co-investor Revolution Growth was founded by chairman and chief executive Steve Case, one of the US’s best-known entrepreneurs, who in 1985 co-founded AOL.
LDiscovery, which was established in 2005 and is headquartered in McLean, Virginia, was ranked number 422 in Deloitte’s 2015 Technology Fast 500, a ranking of the fastest growing technology, media, telecommunications, life sciences and energy tech companies in North America, having grown 148% during that period.
“For over a decade, LDiscovery has been at the forefront of the rapidly growing eDiscovery services market, and the company has an outstanding reputation for client service and a world class technology platform. We are excited to partner with Chris and his management team to help the company continue to invest in innovative solutions and pursue strategic acquisitions to best serve the company’s clients,” said William Darman, a Managing Director with The Carlyle Group.
LDiscovery serves more than 700 blue chip clients, including some of the world’s largest financial institutions, Fortune 1000 companies and AmLaw 100 firms. The company’s comprehensive discovery solution addresses each step of the Electronic Discovery Reference Model (EDRM), a process essential to the workflow of any major legal action or lawsuit.
“Having partners like Carlyle and Revolution will help accelerate LDiscovery to the next level by continuing to invest in our customer service capabilities and our technology solutions. I am thrilled to be working with both firms during this next phase of growth,” said Weiler.
The acquisition comes during a period of consolidation and investment within the eDiscovery market, with recent activity including Consilio’s acquisition in December 2015 of Proven Legal and Huron Legal, and in the same month Inventus Solutions’ acquisition by RPX Corporation from Clearlake Capital Group.
Carlyle’s investment came from the Carlyle U.S. Equity Opportunity Fund II, a U.S. middle-market fund. The middle market team’s investments include: Philadelphia Energy Solutions, the largest refinery on the eastern seaboard; Service King, one of the largest automotive collision repair centres in the U.S.; AxleTech International Holdings, Inc., a manufacturer of automotive components; ECi Software Solutions, a provider of enterprise resource planning and business applications to small and medium sized businesses; and Coalfire, a provider of cyber-risk and compliance services.
Revolution Growth seeks to invest in companies that are attacking large, traditional industries with innovative products and services. The firm has invested in companies such as e-commerce platform Bigcommerce, reverse logistics operator Optoro, and sports data analytics provider SportRadar.
Latham & Watkins served as legal advisor and Ernst & Young as financial advisor to Carlyle. Cooley advised Revolution, while Hogan Lovells acted as legal advisor, and Robert W. Baird & Co. as financial advisor, to the company, which prior to the transaction had been controlled by an affiliate of WestView Capital Partners.