Public investment vehicle Pivotal Acquisition and electronic discovery and information governance company KLDiscovery have agreed to merge.
The fallout of this deal would see a public company valued at $800m. KLD anticipates around $310m in revenue and 36 per cent growth in adjusted EBITDA to $75m for the fiscal year ending December 2019.
Founded in 2005, KLD delivers software and services which help protect corporations from information governance, compliance and data issues. Its electronic discovery tools and products include information governance, forensic collections, secure on-line hosting and advanced analytics.
The company claims to be one of the few businesses to service complex cross-border matters while complying to data privacy laws.
Financial services can leverage KLD for securing documents, meet archiving needs and protect personal data. The solution also helps meet communication monitoring requirements, such as easy review of Bloomberg Chat and tools to help teams visualise audio and video files.
Following the merge, KLD management team, led by CEO Chris Weiler and CFO Dawn Wilson, will run KLD.
KLD President and CEO Chris Weiler said, “Pivotal’s capital and public stock currency enables us to have an optimized balance sheet and the ability to capitalize on the consolidation of a fragmented industry valued at $21 billion in annual revenue by IDC1. In partnership with Pivotal, we have the opportunity to combine our organic growth platform with our ongoing competency in completing strategic acquisitions of scale, as well as smaller, highly accretive ‘tuck-in’ transactions.”
The transaction will see shareholders and management of KLD retain 100 per cent of their equity in the combined company. Once merged, current shareholders of KLD and Pivotal will hold approximately 56 per cent and 44 per cent, respectively.
At closing, current KLD shareholders of KLD will receive an aggregate of 34 million shares of Pivotal common stock. Additionally, they have the right to receive up to 2 million shares of Pivotal common stock, if the sale price of the shares exceeds $13.50 apiece for 20 consecutive days.
