Monday, April 02, 2012

eDiscovery Industry Investor Review by VRA Partners, LLC

VRA Partners, LLC published its electronic discovery industry investor review last week. The report provides details about the topics & trends in the eDiscovery industry: M&A, Private Equity and Public Markets; along with a list of relevant M&A transactions in the sector (listing target and acquiring companies). Below are a few excerpts.

Introduction
The electronic data discovery (“EDD”) market, a subset of the larger litigation support and legal sector markets, has seen dramatic change over the past 10 years and even more dramatic change within the last 5 years. The market, which was not in existence all that long ago, is estimated by some experts to be over $3 billion and is expected to grow considerably over the next few years with some estimates at over 30% annually.

Among EDD vendors, evolution has been rapid. The dominant names and players of the mid 2000s are in many cases gone, seriously wounded or now part of larger entities as a result of acquisition or merger. New market entries have consistently emerged, with some having subsequently disappeared, over this time frame. Most of the prevalent software companies in recent years were not even in existence in the early 2000s.

Most service providers today don’t own the technology they use to provide service. For the majority of EDD service providers, the emphasis has shifted from developing or accessing proprietary technology to building workflows, developing middleware and providing technology and litigation expertise in order to utilize today’s commercially available technology in an efficient and seamless process.

Buyers of EDD services and technologies are becoming more sophisticated and knowledgeable both at the corporate and law firm level and therefore simply gaining access to technology is no longer the primary factor in the buying decision.

The net effect of this considerable change in the EDD sector is a more stable, predictable and sophisticated overall market. It is a more attractive market for investment and consolidation than it was a few years ago with efficiencies of scale likely to gain increased importance over time.

Continue reading the 2012 report here: eDiscovery Industry Report.

Also worth noting:
eDiscovery Daily Blog posted a nice overview of the study, summarizing some interesting facts about the eDiscovery market size and industry growth.

Follow this link for an overview VRA's 2009 report titled Legal Support Industry - Investor Report.

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