Flexing its muscle in the legal technology space, OpenText announced the acquisition of Denver-based firm Catalyst Repository Systems, Inc. for an estimated $75 million in cash. Founded in 2000, Catalyst’s cloud-based platform offers enterprise-level e-discovery capabilities targeted specifically for the legal sector.
Catalyst’s product portfolio spans across advanced search and analytics, document review, business intelligence, and notable managed services in e-discovery, all of which reflect OpenText’s concerted investment areas as of late. With a global customer base, Catalyst also offers OpenText additional expertise in the Asian markets and multinational operations.
In a statement on the acquisition, OpenText CEO Mark Barrenechea said, “The joint strength of OpenText and Catalyst combines a powerful set of solutions to help corporate legal departments and law firms seize the opportunities of automation, digital transformation, AI, and machine learning.”
In this modern age of high-profile data breaches, the visibility and growing influence of the corporate legal department is certainly becoming an attractive vertical for acquisitive investments. A vast majority of organizations point to legal’s rising power around information security decisions, according to a survey of 35 legal operations leaders within Fortune 500 and 1000 companies recently conducted by Ari Kaplan Advisors.
With 66% of survey respondents looking to increase their spending on artificial intelligence (AI) solutions in 2019, combined with an additional 74% interested in enterprise content management (ECM) integration with their e-discovery systems, this latest deal by OpenText displays their efforts to take a chunk of this growing vertical segment while further expanding their own e-discovery platform at the same time. In fact, the global e-discovery market is expected to grow to $17.32 billion by 2023, according to market research firm MarketsandMarkets.
With roughly $45 million in TTM revenue, Catalyst will be integrated into OpenText’s e-discovery solution suite by early 2020. This latest addition follows the 2017 acquisition of endpoint security market leader Guidance Software, which combined the e-discovery, forensic security, and data risk management capabilities in Guidance EnCase with their own e-discovery platform OpenText Axcelerate.