If you know discovery, maybe you saw this coming. An ediscovery provider just became an $800 million company.
It was bound to happen, what with big data becoming too big even for Biglaw. The ediscovery entrepreneurs saw it, and now they are killing it -- in a good way. KLDiscovery cashed in by merging with Pivotal Acquisition Corp., a public investment vehicle. The deal makes KLD a publicly listed company, and you know what that means: Just like old-school discovery, the potential for ediscovery is endless.
The company evolved from Koll Ontrack, which investors purchased in 2016 for $410 million and rebranded as KLDiscovery in 2018. The investors, The Carlye Group and Revolution Growth, will retain and rollover their shares in the merger.
KLD, which provides ediscovery and data recovery services, will keep its management team. Dan Akerson, former CEO of General Motors, will serve as Pivotal's board of directors. Bob Ambrogi, who publishes the Lawsites Blog, called it a "major merger."
"With approximately 54% annually recurring revenue, it projects approximately $310 million in revenue and 36% growth in adjusted EBITDA to $75 million for 2019," he wrote. According to KDL, its customers include 65 percent of the Fortune 500 companies and 95 percent of the 100 largest law firms in the United States. It lists 43 offices in 20 countries.
Legal observers say law firms and companies are still learning how to manage big data and ediscovery costs. They say other challenges include:
"The process has already begun, but will truly blossom in 2019," according to JDSupra. Like KLD, if you didn't see that coming.