According to Rob Robinson on ComplexDiscovery, we’ve had a slow start in 2024 for eDiscovery mergers & acquisitions, and investments (M&A+I).

Or have we?

Rob’s post on eDiscovery in 2024: A Midyear M&A Pulse Check shows there were 12 M&A+I events over the first half of the year. At that rate, we would have 24 M&A+I events for the year, barely over 2022’s low number of 22 events, behind the pace of last year’s 35 events and well off the pace of 2021’s epic 55(!) events.

However, the slow start in 2024 may not be as slow as it seems. If you look at first-half totals for the past four years, these are Rob’s reported totals:

• 2023: 13, final total – 35
• 2022: 12, final total – 21
• 2021: 27, final total – 55
• 2020: 14, final total – 36

Only the record year of 2021 was way ahead of this year’s total, and only the dismal year of 2022 had a slower second half than first. So, maybe it’s not such a slow start in 2024 after all! And we’ve already seen two transactions in July, so maybe things are heating up!

Rob also notes that “High interest rates have influenced M&A strategies, but with interest rates expected to stabilize and potentially decline in late 2024, more favorable financing conditions for M&A deals could emerge.” So, that’s another reason to expect that transactions may pick up in H2 2024.

Some of the transactions we saw in the first half of 2024 include: Complete Legal announcing a merger with L2 Services and Precise Legal, then acquiring Frontline Managed Service’s eDiscovery unit, Array acquiring Ricoh’s eDiscovery unit, ever-active Reveal acquiring Onna, and KLDiscovery entering into agreements to reinforce its long-term financial foundation.

As for what trends these transactions illustrate, it depends on your point of view. Rob notes that: “Market consolidation continues, with more prominent players acquiring smaller, specialized firms to enhance their service offerings and market share.”

My take is that while we continue to see M&A transactions into the marketplace, we’re also continuing to see new entries into it, especially in the era of generative AI where we’re seeing new products enter the market that take advantage of genAI. The big eDiscovery software and service providers are continuing to get bigger, but there is still plenty of market for smaller players to continue to carve out a niche. Rob and I will have to agree to disagree on this one! 🙂

ComplexDiscovery has noted at least 580 M&A+I events between November 2001 and July 2024! His running list isn’t at the bottom of the post like it used to be, but you can still find it in the bottom of this post from a few years ago (the list is up to date even though the post is old).

To check out Rob’s post, click here.

So, what do you think? Do you think the eDiscovery market is consolidating? Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by my employer, my partners or my clients. eDiscovery Today is made available solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Today should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.