Interwoven Acquires E-discovery Firm

Enterprise content management provider Interwoven is extending its reach into the e-discovery software-as-a-service business, which really is little more than a deeper dive into content management.

Interwoven announced July 24 it is acquiring six-year-old Discovery Mining, an e-discovery provider to professional services firms and corporations, for $36 million in cash.

Discovery Mining's software service automates the discovery phase of litigation and investigations for processing, reviewing and producing massive volumes of electronic data.

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For its bundle of cash, Interwoven will obtain all outstanding shares of Discovery Mining and vested stock options and assume existing employee stock options.

Electronic records management software has become a strategic tool for organizations due to increasing national and regional regulations such as the 2006 additions to the Federal Rules of Civil Procedure, the Sarbanes-Oxley Act, and the Data Protection and Freedom of Information Acts.

E-discovery itself is the process by which records are gathered and processed for litigation. This includes anything digital: word processing files, photos, e-mail, audio and video files, instant messaging transcripts, Internet bookmarks, and even data center users' logs.

"E-discovery has become an absolutely vital component of the litigation process," Interwoven CEO Joe Cowan told a conference call of analysts and journalists. "Being able to handle and process hundreds or thousands of documents is a monumental job. These people [Discovery Mining] have figured out how to automate all of that. Their solution is unlike anybody else's on the market."

According to a recent report by Forrester Research, the North American e-discovery market, which in 2006 was $1.45 billion, will grow to almost $4.89 billion by 2011—an increase of 238 percent in five years.

Discovery Mining's service features capabilities for accelerated review, including concept searching, clustering, analytics and e-mail filtering.

Discovery Mining was ranked by law firms as a Top 5 provider of E-discovery services in the 2008 Socha-Gelbmann Electronic Discovery Survey. The company has worked with more than half of the Am Law 100 firms, as well as a number of Fortune 500 corporations.

Interwoven has an online community of more than 20,000 developers and over 300 partners.

The acquisition is expected to be completed in the third quarter of 2008.