eDiscovery Mergers, Acquisitions, and Investments in 2020

Editor’s Note: Given the challenge of monitoring and tracking merger, acquisition, and investment activity for eDiscovery-related companies, from time to time the quarterly and annual reporting of the number of events may change slightly as new information becomes available concerning these events. The information shared in this report represents the latest information as comprehended by ComplexDiscovery as of December 31, 2020.

eDiscovery Mergers, Acquisitions, and Investments in 2020

Since beginning to track the number of publicly highlighted merger, acquisition, and investment (M&A+I) events in the eDiscovery ecosystem, ComplexDiscovery has noted at least 453 M&A+I events between November 2001 and December 2020.

While not all-inclusive due to the fact that M&A+I events are not always publicly disclosed, the abridged listing of M&A+I events maintained by ComplexDiscovery notes key industry business moves by sharing event date, company involvement, and event amount (if known).

Based on an aggregate review of the abridged listing through the lens of 2020, the following findings, drivers, data points, and tracking charts may be useful for understanding M&A+I activity patterns in the eDiscovery ecosystem from January 1, 2020, through December 31, 2020.

Four Key M&A+I Findings for 2020

• There were at least 36 M&A+I events in the eDiscovery ecosystem during 2020.
• January was the most active month in 2020 for M&A+I events with at least six total events.
• April was the least active month in 2020 for M&A+I events with no reported events.
• Even with the constraints of the COVID-19 pandemic, the aggregate of M&A+I events in 2020 appears to be the sixth-highest total for the industry since 2001. The total number of events for the year was 10 less than the number of events in 2019 (46) and 13 less than the number of events in 2012, the high-water mark year of investment where at least 49 events were reported.

Four Key M&A+I Drivers in 2020

Investor confidence and market conditions appeared to be favorable for investment events at the start of 2020, only to be impacted by the rapid emergence of adverse pandemeconomic conditions beginning in March due to business constraints created by the worldwide COVID-19 pandemic. Drivers fueling investment in eDiscovery during 2020 generally mirrored the drivers fueling investments in 2019 with the exception of investing during April and May of 2020, when pandemeconomic conditions created a noticeable pause in normal investing pulse rates. Based on observations of the market and conversations with commentators and value creators, 2020 investing drivers included:

• Continued consolidation of eDiscovery products and services providers is being driven by a combination of the need for accelerated revenue growth, increasing availability of distressed assets, and substantial access to investment money.
• Continued focus on innovation being driven by the continued commercialization of emerging technologies (e.g., artificial intelligence) and the increasing maturity of advanced technologies (e.g., predictive coding).
• Continued focus on internationalization being driven by the need to access new markets and revenue streams as well as the need to serve underserved markets.
• Emerging opportunities for eDiscovery technologies, techniques, and talent in areas outside of the traditional legal discovery continuum in support of cybersecurity and information governance-related audits, investigations, and litigation.

In considering the year in total, it appears that even with the constraints of COVID-19 beginning in March, the motivation for investing continued to be strong, the market opportunity for investments continued to grow, and the access to money continued to be attractive for investments during 2020.

M&A+I Data Points

Activity By Month (2020)

• January – 6
• February – 2
• March – 2
• April – 0
• May – 1
• June – 3
• July – 5
• August – 5
• September – 4
• October – 2
• November – 2
• December – 4

Activity By Month (2019)

• January – 11
• February – 3
• March – 1
• April – 3
• May – 2
• June – 8
• July – 5
• August – 4
• September – 2
• October – 2
• November – 3
• December – 2

Activity By Month (2018)

• January – 7
• February – 2
• March – 5
• April – 7
• May – 4
• June – 5
• July – 1
• August – 4
• September – 2
• October – 4
• November – 3
• December – 3

M&A+I Tracking Charts

(Charts Can Be Expanded for Detailed Viewing)

Chart #1: An Overview of Merger, Acquisition, and Investment Events by Calendar Month (2020)

Chart #2: Merger, Acquisition, or Investment Events vs. Month (November 2001 Through December 2020)

Chart #3: Merger, Acquisition, or Investment Events vs. Year (November 2001 Through December 2020)

M&A+I Events (Running Listing: November 2001 – Today)

Index: eDiscovery Mergers, Acquisitions, and Investments

Additional Reading

• An Abridged Look at the Business of eDiscovery: A Short List of eDiscovery Investors
• An Abridged Look at the Business of eDiscovery: Mergers, Acquisitions, and Investments

Source: ComplexDiscovery