Monday, April 27, 2009

Kazeon Secures $10 Million in Funding

Kazeon Systems, a company that specializes in software used for electronic investigations and discovery of buried network information, just brought in $10 million in sixth-round funding from JK&B Capital, Clearstone Venture Partners, Menlo Ventures and Redpoint Ventures, reports peHub. Based in Mountain View, Calif., the firm had previously banked $65 million in capital since its inception in 2003.

Among the processes it streamlines, Kazeon focuses on information management for advanced security and privacy, record-keeping and compliance and risk calculations.

Friday, April 17, 2009

Unify to Acquire AXS-One

ROSEVILLE, Calif., – April 16, 2009 – Unify Corp. (NASDAQ: UNFY), a global provider of application development, database and migration products, today announced that it has entered into a definitive agreement to acquire AXS-One (OTCBB: AXSO), a leading provider of integrated content archiving software solutions. The acquisition, which is subject to approval by the stockholders of Unify and AXS-One, is expected to close by the end of Unify’s fiscal first quarter, ending July 31, 2009.

Through the agreement, Unify will purchase all outstanding shares and debt of AXS-One in an all-stock transaction valued at approximately $8.0 million, based on Unify’s closing stock price yesterday, subject to certain closing adjustments.

The acquisition is expected to create a more competitive, cost efficient company with a larger customer base, increased maintenance revenues and a significant growth potential. AXS-One’s 2008 revenues were $13.4 million, up 12% over 2007, including approximately 48% recurring maintenance revenue. Based on the expense reductions previously implemented by AXS-One and the further cost savings expected post closing, Unify expects the transaction to be accretive on a non-GAAP basis by the end of its fiscal second quarter, ending October 31, 2009.

Thursday, April 16, 2009

Legal Support Industry - Investor Report: by VRA Partners

This report, published by VRA Partners in April 2009, provides details about the following topics & trends in the legal support industry: Litigation Support, Law Firm Technology & Services, Sector M&A, Sector Private Equity and Sector Public Markets; along with a list of the transactions (listing target and acquiring companies) dating back to January 2008. Below are a few excerpts.

Introduction:
The United States legal support sector is unique in both its size and importance. The country’s predilection for litigation and complex regulation supports an industry that has the most lawyers, and the most lawyers per capita, of any country in the world. As a benchmark of the legal support sector’s size, the U.S. supports approximately 250,000 law firms that represent a $235 billion market. Historically, this market has exhibited consistently strong growth. According to Hildebrandt International, law firms experienced unprecedented double-digit annual revenue growth between 2001 and 2007. Due to these size and growth characteristics, the legal support sector has been an increasingly attractive sector for technology and service providers, as well as investors.

Impact of Recession:
Though the legal market has historically demonstrated strong growth and resistance to economic downturns, productivity began to decline in 2007 as the economy softened. 2008 marked the worst year in the legal market in 20 years due to sharp downturns in real estate, structured finance and transactional practices, such as capital markets and merger and acquisition activities.

“Current economic conditions will further prompt corporations and law firms to utilize cost-lowering technologies, low-cost service providers and additional
outsourcing.”

Trends Unrelated to the Recession:
Notwithstanding the current economic environment, significant trends have influenced the legal support sector. Two of the most significant trends are:
- Increased complexity of the discovery process due to the proliferation of electronic documents and communications
- Growth, consolidation and globalization of law firms to meet the needs of their growing, global corporate clients

“We expect to see significant merger activity over the next 12 to 24 months between firms whose growth has stalled and are unable to generate significant, consistent profitability due to the required infrastructure and the volatile nature of the revenue streams they are generating.”

“The cost of review is estimated to be approximately $5 to every $1 of EDD processing, which would estimate the total market for review services to be over $10 billion.”

Recent M&A Issues:
- Overall market conditions and credit crisis
- Several failed sale processes of EDD businesses due to the inability to achieve desired valuations
- Track record of private equity (“PE”) firm investments in the sector that have either failed, sold for a fraction of cost, or restructured to survive

Why the sector is still attractive for M&A and private equity:
- Long-term growth sector
- Dynamic market
- Many companies are still achieving very attractive margins (20%+ EBITDA)
- Importance of scale
- Significant market fragmentation

You can download the entire 15 page Legal Support - Industry Review report from the VRA Partners' website.

StoredIQ Secures $8 Million Financing

Austin, TX. – April 14, 2009 — StoredIQ Inc., a leading provider of Intelligent Information Management and eDiscovery technologies, today announced that it has closed an $8 million investment financing from its existing investors, including S3 Ventures and Techxas Ventures. The company also announced that it has added industry veterans Dan Junk as vice president of business development and Ellis Ishaya as vice president of partner development to its management team.

"StoredIQ’s product offering is unique, because it provides a unified, easy to deploy platform that meets the compliance, eDiscovery and information management requirements of the enterprise, while contributing to immediate cost and risk reductions," said Christine Taylor, analyst with Taneja Group. "Couple a great product with substantial market demand, add this type of funding in the current economic climate and StoredIQ is well-positioned to become a market leader."

StoredIQ will use the financing to expand its award-winning information management and eDiscovery solution, grow its industry partnerships and accelerate the company’s marketing and distribution initiatives to take advantage of the significant market opportunity that lies ahead. The eDiscovery market, which is about $3 billion to $4 billion in size, is expected to double in three years, according to Robert W. Baird & Co analyst Andrea Wirth, quoting industry findings.

Monday, April 06, 2009

Litigation Support Company For Sale

The following overview was sent to me by BCMS Corporate . I have no additional information about the company other than what is listed below, but thought it may be of interest to my readers. If you are interested in receiving additional information, please see contact information at the bottom of the post.

Key Facts:
Location Mid-Atlantic Region
2008 Revenue $1.70 Million
Employees 15

Business Overview:
• A business to business service company that provides premium-quality professional and mission critical document management services to the business and legal industries

Specialty Areas:
o Proposal Production – complex and deadline driven document printing and assembly of multi-million dollar proposals – “white glove service”
o Litigation Support – time sensitive and intricate paper and electronic data discovery and trial support services
o Document Production – Total management and preparation of business meeting, conference documents and other materials
• Exceptional client service provided by a team of industry professionals
• High quality products produced in a state-of-the-art facility with the latest industry technology and equipment that accommodates complex last minute alterations and production

Customers and Markets:
• Business - clients range from small consulting firms to Global Fortune 100 companies
o firms in need of proposal production services to secure government contracts. The value of client proposals supported is in the tens of billions of dollars.
o companies that need meeting, conference, presentation and training materials
o companies that need paper and digital archiving
• Legal - clients include a spectrum of tier-1 law firms, general practices and corporate counsel of private and public companies
• Associations and non-profit organizations – in need of meeting, conference, presentation and training materials

The Opportunity:
• A rare opportunity to acquire a Company with a proven process in delivering excellence to both niche and conventional industries
• A client base comprised of many tier-1 businesses including relationships that extend to the senior leadership level
• A firm with an applicable and scalable business model
• Excellent future growth potential
• A Company with 99% customer retention rate
• Business based on referrals as a result of proven quality assurance processes and professional client service standards
• Ability to successfully perform large, complex, and time-sensitive digital document production projects
• The Company consistently performs above demanding clients expectations
• The Company is very active in a resilient economic region and supports Companies that pursue state, local and federal government opportunities

Contact Information:
For more information or to request a NDA please e-mail or call Alon Hillel-Tuch at 212-520-8373 or alon.hilleltuch@bcmscorp.com.

The information one would receive after an executed NDA would be a full memorandum with company identity, operational overview, 3 year’s historical financials and future projections.

Thursday, April 02, 2009

Article Overview - Fragmented e-discovery space to see spike in deal making

Here is an interesting article by Bijoy Anandoth Koyitty posted on Reuters about how acquisitions will play a part in the growth plans of some of the larger companies in the e-discovery space. You can click on the heading above to view the entire article. A few key exerpts....

BANGALORE (Reuters) - In mid-2000, as the dotcom boom was peaking, executives of information protection firm Iron Mountain Inc noticed an interesting trend while doing PC back-up and e-mail archiving for their clients.

Customers were increasingly demanding a system that would help them search and retrieve documents from complex file back-ups for producing as evidence in litigation, internal investigations and regulatory inquiries.

Nine years since, the technology, known as electronic discovery, has spawned a highly fragmented $3 billion industry, and the bigger players are now eyeing acquisitions to broaden their customer base.

"There are many smaller players with revenue, but not many with critical mass. Some have decent products. So the business is ripe for consolidation," Sidoti & Co analyst David Gold said.

In the nascent years of e-discovery, Iron Mountain responded to its customers by offering existing solutions. Later, in 2007, when it found that time was ripe for serious investments, it got aggressive with the acquisition of e-discovery firm Stratify.

Along with Iron Mountain, several other companies like FTI Consulting, Epiq Systems and Guidance Software and privately held firms such as consulting giants Ernst & Young, KPMG, Deloitte and PricewaterhouseCoopers, are competing for a bigger share of the market.

In the last five years, the market saw as many as 18 acquisitions, according to technology research firm Gartner.

Recent ones include business advisory firm FTI Consulting's deal for Attenex and Seagate Technology's acquisition of MetaLINCS.

Larger players such as IBM, EMC Corp and Symantec Corp operate in the technology platform solution segment of e-discovery.

... Analysts believe it is important for companies to focus on acquisitions that are technology specific and build a complete platform at this point in time, than go in for roll-up acquisition that targets a rival's turf.

Companies will not be able to gain considerable market share through roll-up acquisitions presently because of the fragmented market, and any such action would be a "very risky process," analyst Mark Schappel of Benchmark Co said.

"We will consider acquiring technology that rounds out our core capabilities and integrates well with our technology," Guidance Software CEO Victor Limongelli said.

... The years that followed saw regulations getting stringent on e-discovery and an amendment in December 2006 made it mandatory to include electronically stored information in initial disclosures.

"E-discovery is something that organizations have to do these days, regardless of other technological investments," said John Bace, an analyst with Gartner.