HG Capital takes majority stake in Mitratech

Hg took a lead investment in Mitratech in April 2017, acquiring control of the Austin software developer. TA Associates, which had backed the business in September 2015, kept a minority interest, and the management team reinvested alongside the new sponsor. Founded in 1987, Mitratech develops software for the legal and risk departments of large companies. Its products track the matters and litigation a company is engaged in, analyse what it spends on them, receive and check the invoices sent by outside law firms before payment, manage contracts through their life, record the policies and obligations each regulation imposes, and preserve documents when litigation requires it. Its customers were 1,200 corporate organisations with more than 500,000 users across over 160 countries, supported from offices in the United States, the United Kingdom and Australia, while more than 12,000 law firms used its platform to bill their corporate clients. The company had grown fast in the eighteen months before the transaction, more than doubling in size through acquisitions and opening its British and Australian operations. Hg invested on the basis of the recurring nature of the revenue, the regulatory obligations the software supports and the scope for further acquisitions. Software of this kind is difficult to displace once installed: it holds the record of matters, contracts and obligations a company must produce under audit, and replacing it means migrating years of documentation. That durability is what allowed successive owners to build the business by acquisition, each purchase adding a category of work the same departments already performed. Lazard and Marks Baughan Securities advised Mitratech and TA Associates, with Goodwin Procter as legal counsel, while William Blair advised Hg, with Deloitte on due diligence and White & Case as legal counsel.