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8-K - FORM 8-K - Dolan Co. | c20372e8vk.htm |
EX-2.1 - EX-2.1 - Dolan Co. | c20372exv2w1.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
DiscoverReady Acquires ACT Litigation Services
Strategic Expansion Links E-Discovery Market Leaders
in First Pass Review and Technology-Driven Processes
in First Pass Review and Technology-Driven Processes
MINNEAPOLIS, MN, July 25, 2011 The Dolan Company (NYSE:DM) announced today that its
DiscoverReady subsidiary had completed a significant strategic expansion in the electronic
discovery sector with the acquisition of the assets of ACT Litigation Services, based in Valencia,
CA.
The purchase price was $65 million with additional future payments possible depending upon
performance. The transaction closed July 25.
ACT is one of the countrys oldest and most successful complex litigation automation firms and
specializes in providing technology and process solutions to clients with electronic discovery
needs. The company delivers the most efficient available processes to complete e-discovery
projects faster, better and more economically. It also provides hosting and review services.
DiscoverReady provides first-pass document review, managed services and data processing and
hosting to the e-discovery sector. The company was a pioneer in fixed-fee document review and
automated review. In 2009 it was acquired by The Dolan Company. Like ACT, DiscoverReady services
the legal needs of large corporations and their legal counsel.
Combining ACT and DiscoverReady solidifies our position in the top echelon of e-discovery
providers, not just in talent, client base and capacity, but also in terms of quality and
innovative solutions, said James P. Dolan, president and chief executive of The Dolan Company. He
said the acquisition combines industry leaders in review and in technology and process development.
Dolan said ACTs trailing 12-month revenues were approximately $30 million. The transaction
will be immediately accretive to cash earnings per share. He said the transaction reduces the
companys revenue concentration by spreading its business across many more clients. For example,
upon closing the transaction, on a pro-forma basis, only one DiscoverReady client accounts for more
than 10% of DiscoverReadys revenues.
We have known the team at ACT for more than decade. During that time, we have admired their
strong market reputation and business philosophy, said DiscoverReady chief
executive officer Jim Wagner, adding, We both are process first organizations and ACTs
client-centric quality-focused culture complements our own.
Both DiscoverReady and ACT are national companies serving a range of clients. DiscoverReady
is headquartered in New York City with operational management in Charlotte, NC, and San Francisco.
ACTs operating headquarters and data center are in Valencia, CA, with other offices in
Philadelphia, Pittsburgh, New York City, Cleveland and the Philippines. All existing locations for
both companies will remain and the parties intend that all of ACTs employees will be retained,
Wagner said.
The complementary fit drove the acquisition, the executives said. While DiscoverReady was
founded by lawyers who pioneered fixed-fee document review, ACTs founders approached the market as
engineers who provided custom technology and solutions for clients struggling with complex
discovery matters.
Besides the philosophical and cultural fit, the operational synergies between DiscoverReady
and ACT are tremendous, said Wagner. With this transaction we are uniquely positioned to deliver
both high-quality review, high-volume processing and hosting in a wide variety of platforms, and,
of course, automated review through our i-Decision® system and PrivBank® software. We have little
client overlap and, geographically, ACTs West Coast location counterbalances our East Coast
presence, and its facilities and tremendous processing capacity give us the ability to meet the
needs to our collective growing client base, Wagner said.
ACT co-founder and President Steve Marks said the company has been consistent in its strategy
since launch 27 years ago. ACTs mission has always been to solve our clients business problems
by providing process and application expertise to business, Marks said. Finding a partner like
DiscoverReady, which shares so many of our cultural values, was critical, both for our customers
and our employees. Together, ACT and DiscoverReady will leverage our complementary strengths and
our collective intelligence to build a stronger company than we were separately.
Marks and ACT co-founder Hank Schorz, who is executive vice president and chief technology
officer, together with Vice President Tom Stevens and the other members of their senior leadership
team, will continue to lead day-to-day operations of the ACT business. The integration of the two
companies will result in one of the most robust service offerings available in our industry,
Schorz said. Were excited about the prospect of delivering our combined people, processes and
services to the entire ACT and DiscoverReady client base.
ACT will continue to operate under the ACT brand through the balance of 2011.
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In addition to giving both organizations the ability to share technology and review resources,
the transaction also will enable ACTs clients to benefit from DiscoverReadys automation of the
document review process. DiscoverReadys proprietary i-Decision® system is an intelligent
automated document review process that delivers consistent, defensible results with cost reductions
of up to 70%. Its PrivBank® software draws on a huge and proprietary database to identify
privileged information subject to special treatment in the e-discovery process.
Dolan said the transaction was funded from cash resources and by The Dolan Companys existing
debt facilities. He said he expected to include future performance contributions from ACT in
revised guidance to be discussed during The Dolan Companys quarterly earnings call, scheduled for
Aug. 2, 2011.
For additional information about DiscoverReady, visit www.DiscoverReady.com or the
DiscoverReady blog www.discoverready.com/blog.
DiscoverReady is a majority-owned subsidiary of The Dolan Company, a leading provider of
professional services and business information to the legal, financial and real estate sectors. Its
Professional Services Division provides specialized outsourced services to the legal profession
through its subsidiaries, NDeX, DiscoverReady and Counsel Press. NDeX is a leading provider of
mortgage default processing services in the United States. Counsel Press is the nations largest
provider of appellate services to the legal community. The companys Business Information Division
publishes business journals, court and commercial media and other highly focused information
products and services, operates web sites and produces events for targeted legal and professional
audiences in each of the 21 geographic markets that it serves across the United States.
For additional information about The Dolan Company, visit www.thedolancompany.com.
FOR MORE INFORMATION:
Robert J. Evans, Director of Investor Relations
(612) 317-9430, Bob.evans@thedolancompany.com
Robert J. Evans, Director of Investor Relations
(612) 317-9430, Bob.evans@thedolancompany.com
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Statement Regarding Forward Looking Information
This release contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Statements that are not historical or current facts are
forward-looking statements. Such forward-looking statements include statements related to the
companys guidance as well as statements using words such as anticipate, expect, believe,
continue, to come, will, may, estimate, assume, pursue and similar expressions.
Forward-looking statements are subject to risks, uncertainties and other factors that could cause
our actual results, performance, prospects or opportunities to differ materially from those
expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other
factors include, but are not limited to, the following: our businesses operate in highly
competitive markets and depend on the economies and demographics of the legal, financial and real
estate markets we serve, and changes in those sectors could have an adverse effect on our revenues,
cash flows, and profitability; if the number of files referred to us by our mortgage default
processing service law firm customers (or loan servicers and mortgage lenders we serve directly for
mortgage default files in California) decreases or fails to increase, our operating results and
ability to execute our growth strategy could be adversely affected; bills introduced and laws
enacted to mitigate foreclosures, voluntary relief programs and voluntary halts or moratoria by
servicers or lenders, as well as governmental investigations, enforcement actions, litigation and
court orders, may have an adverse effect on our mortgage default processing services and public
notice operations; growing our business may place a strain on our management and internal systems,
processes and
controls, may result in operating inefficiencies, and may negatively impact our operating margins;
we intend to continue to pursue acquisition opportunities, which we may not do successfully and
which may subject us to considerable business and financial risk or require us to raise additional
capital or incur additional indebtedness; we depend on our senior management team and other key
leaders of our business segments, and the operation and growth of our business may be negatively
impacted if we lose any of their services; revenues of our subsidiary NDeX and our subsidiary
DiscoverReady are each very concentrated among a few customers, thus the loss of business from
these customers and a failure to attract new customers could adversely affect our operating
results; certain key personnel of our subsidiary NDeX, who are also shareholders and principal
attorneys of our law firm customers, may at times have interests that differ from or conflict with
our interests; and the other risk factors described under Risk Factors in Item 1A of our annual
report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 11, 2011. We
undertake no obligation to update any forward-looking statements in light of new information or
future events.
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