LDiscovery makes good plans for further growth with Kroll Ontrack acquisition
Following its acquisition by private equity houses The Carlyle Group and Revolution Growth in January 2016, it was perhaps little surprise that LDiscovery last week acquired Kroll Ontrack for $410m, as consolidation across the eDiscovery sector continues apace.
LDiscovery acquires Kroll Ontrack from Corporate Risk Holdings in an all cash transaction that will create a combined organisation of 12,000 clients worldwide, offices in 19 countries, and approximately 1,300 employees worldwide.
The fast growing Virginia-headquartered company 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.
In a sign of acquisitions to come, in January William Darman, managing director at Carlyle, said: “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 [LDiscovery’s CEO Chris Weiler] 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.”
Last week Weiler, who becomes CEO of the combined organisation said: “With this combination, LDiscovery customers will have access to Kroll Ontrack’s global footprint, proprietary review platform and the world’s best data recovery services, while Kroll Ontrack customers will leverage LDiscovery’s proprietary suite of eDiscovery technology, including our remote collection tool, ESI processing platform, eDirect365™, and our award-winning Relativity integrations, as well as the eDiscovery industry’s most advanced and robust hosting infrastructure.”
The transaction, which is subject to customary closing conditions, is expected to close in the fourth quarter of 2016.
Latham & Watkins is legal advisor to LDiscovery, The Carlyle Group and Revolution Growth while Simpson Thacher & Bartlett is advising Corporate Risk Holdings.
Other consolidation in the eDiscovery sector has included 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.
In July 2016, Epiq Systems was acquired for around $1bn by OMERS Private Equity and Harvest Partners and will be combined with legal process outsourcing and litigation services giant DTI, a private company majority-owned by OMERS and managed by OMERS Private Equity.
In September, Consilio continued to bolster its presence in the United States with the acquisition of Houston-headquartered eDiscovery and litigation support provider EQD.