The acquisition of its former partner will improve Iron Mountain's services portfolio.Data protection and storage provider Iron Mountain announced Oct. 31 plans to acquire Stratify, a provider of advanced electronic discovery services for the legal market, for approximately $158 million in cash, filling a need in its product line.
For several years, Stratify has provided in-depth discovery and data investigation software for Am Law 200 law firms and leading Fortune 500 corporations. It will remain a stand-alone division of Iron Mountain, which has been in business since 1951.
Stratify has served as a key partner to Boston-based Iron Mountain for 18 months, so the companies know each other well, John Clancy, president of Iron Mountain Digital, told eWEEK.
"Stratify has been into high-quality technology before they even got into e-discovery," Clancy said. "When the drumbeats of the pain of some of our customers got to us about these legal issues, we decided we needed to make the move.
"Whereas only the highly regulated industries (financial, health care, government) have always had to deal with e-discovery at some level, now because of the new FRCP (Federal Rules of Civil Procedure) rules, all businesses have to become aware of electronic discovery."
With the acquisition, Iron Mountain adds more functionality to its existing suite of e-discovery services, providing businesses with a complete, end-to-end package that manages paper and digital information for discovery and data investigations, compliance and associated records management, and litigation matters, Clancy said.
"In order to help meet our customers needs in this area, we began an exhaustive search about 15 months ago for the leading provider of electronic discovery and investigation services [to acquire]," Clancy told eWEEK. "We [had already] formed a partnership with Stratify that has since evolved into a natural extension of the Iron Mountain Digital portfolio."
Stratifys advanced service offerings address discovery issues for both paper and digital records. The acquisition allows Iron Mountain to directly help businesses minimize the risks of e-discovery by simplifying the process and enabling attorneys to easily identify and protect privileged documents during review, Clancy said.
"This is a very smart move by Iron Mountain; its not surprising," Brian Babineau, a senior storage analyst with Enterprise Strategy Group, told eWEEK. "They know what they are doing up there in Boston. They partner with a few folks in a market and then see if it makes sense to own it or stick with partnering route."
Stratify is well known in the industry because it built its own software for information processing, indexing and searching, Babineau said, whereas most legal-service providers buy technology from other vendors and use it to deliver their capabilities.
As far as integrating Stratifys software into the Iron Mountain product catalog is concerned, Babineau said there needs to be process integration first, and that the technology is not as important.
"E-discovery is a process where every time information changes hands, it needs to be documented for chain-of-custody purposes. Now, with this deal, the information can stay within one organization if the customers information is already at Iron Mountain," Babineau said.
Iron Mountain is already known for cost-efficient information storage and management solutions, he added.
"Our research shows that nearly 40 percent of North American corporate counsels expect electronic discovery spending to remain flat next year. The only way this is feasible is for organizations to work with partners like Iron Mountain that provide a single point of control that dramatically increases the speed at which data is retrieved, restored, organized, indexed and ready for review," Babineau said.
The Stratify Legal Discovery service provides in-house and outside counsel with comprehensive and easy-to-use review and analysis of e-mail and documents, according to the company. Stratifys capabilities include concept-based review, near-duplicate detection and visual e-mail analytics.
The service also provides attorneys with a single review application for scanned paper and native electronic documents. Stratify also has feature support for European languages and Chinese, Japanese and Korean.
The acquisition is subject to regulatory review and is expected to close by the end of 2007, Clancy said.
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