Exterro completes significant strategic recapitalization in excess of $1 billion

Global News

27
Jul
2022

Editor

Exterro, Inc., a portfolio company of Leeds Equity Partners, announced today that it has completed a strategic recapitalization and secured additional committed equity capital as part of a continuation vehicle transaction valuing Exterro at more than $1 billion (USD).

With the support of a group of leading global institutional investors co-led by Coller Capital and Glendower Capital, this transaction will enable Exterro to devote more resources to the growth of its Legal GRC portfolio of products through M&A and product development. Exterro will continue to develop new initiatives for law firms and service providers, drive accelerated growth of its digital forensics product set and reinvest in its first-class global Training Academy, as it delivers new products to new geographies. As part of the recapitalization, Leeds Equity has made a significant new equity commitment from its latest flagship fund, Leeds Equity Partners VII, L.P., alongside the continuation vehicle and management.

Exterro is a leading provider of Legal Governance, Risk, and Compliance (GRC) software, which provides deep data insights, workflow efficiencies, and process orchestration across e-discovery, digital forensics, data privacy, and cybersecurity use cases. The company operates in a large, fast-growing market with significant macro drivers, including increasing litigation volumes, the proliferation of corporate data, an increasingly complex regulatory environment, the convergence of data risks and the ubiquity of digital evidence in crime and terrorist activities.

“Since our last funding with Leeds Equity, global demand for Exterro’s Legal GRC platform has grown exponentially, fueling our product innovation as we’ve continued building best-in-class e-discovery, data privacy, forensics, risk, and compliance technologies,” said Bobby Balachandran, founder and CEO of Exterro. “As the lines between legal, finance, IT, and security departments blur, Exterro is in a unique position, offering the only platform that can effectively unify and address the data and the legal requirements of those disparate business silos. Leeds Equity has been an incredible partner in Exterro’s growth, and we are thrilled to continue our partnership with them as Exterro enters this new phase of growth.”

Since Leeds Equity’s initial investment in 2018, Exterro has more than quadrupled its revenue, and now serves more than 3,000 customers across the world. Exterro’s concerted growth strategy has focused on organic product innovation, geographic expansion, and strategic M&A, including the acquisition and integration of Jordan Lawrence and AccessData. It has also included significant R&D investments in e-discovery, privacy, digital forensics, and incident management as well as investments in the Exterro team. These business-critical activities are integrated into Exterro’s leading Legal GRC platform, which was designed specifically to manage the convergence between legal operations, litigation support, compliance, breach response, and internal investigations. In addition to Exterro’s corporate markets, the company has also increasingly served law enforcement forensics departments, providing enhanced efficiencies to those agencies that are experiencing budgetary and staffing constraints, most recently with the United Kingdom’s West Midlands Police Department.

“Bobby Balachandran and the entire Exterro team have built an industry-leading business uniquely positioned to help enterprises manage and analyze data and drive actionable business intelligence. These are critical requirements to operating in the face of challenges across e-discovery, data privacy, cybersecurity, and forensic investigations,” said Jacques Galante, Partner at Leeds Equity Partners. “We look forward to building on this great partnership as Exterro continues to capture the immense growth opportunity across its global markets.”

Mr. Balachandran originally founded Exterro in 2008 with the conviction that the legal industry would benefit from, and that there was enormous demand for, process improvements that could be derived from lessons learned in other industries. Today, Exterro offers the only Legal GRC platform for corporations – which include global businesses including Boeing, United Healthcare, American Express, Aflac, and Oracle – to mitigate risks, control costs, and have complete end-to-end visibility into their legal processes. Exterro has won numerous industry awards and accolades, including the Global InfoSec Awards, Best Forensics Product (2022), KM World Reader’s Choice Awards, Best E-Discovery (2021), LegalTech Breakthrough, LegalTech CEO of Year (2021), and more. The company also contributes to numerous civic causes that are spearheaded by its Exterro Gives Back initiative, which supports several organizations, including Women Entrepreneurs of India, Operation Child in the US, the Safe Escape refuge in the UK, and the founding of the LifeRay Foundation, to mention a few.

“The Legal GRC industry continues to be highly attractive given favorable macro tailwinds, and we are proud to continue our strong partnership with Exterro to build on its premier market position. We are excited to continue to support the business through organic investment and strategic M&A,” said Kevin Malone, Principal at Leeds Equity Partners.

Jefferies Financial Group, Inc. acted as the financial advisor, while Kirkland & Ellis and Reed Smith served as legal counsel on the transaction.