Not only is the Nov. 15 coupling of Actiance and Smarsh a marriage of convenience for their owner, K1 Investment Management, it also is both a merger AND an acquisition that appears to make perfect sense.
El Segundo, Calif.-based -based K1, which already owned Smarsh, bought Actiance and then merged the two companies. Terms of the deals were not released Nov. 15; the two companies will retain their names and operate side by side for the time being.
Redwood City, Calf.-based Actiance specializes in software that handles communications compliance, archiving and analytics. Smarsh, the unusual name of which comes from its founder, Chairman and CEO Steve Marsh, has developed an integrated suite of information-archiving applications and services that help companies protect themselves and manage risk.
The combination of Actiance and Portland, Ore.-based Smarsh is designed to solve one of the biggest headaches for companies in regulated industries: securely capturing, archiving and analyzing all communications across any platform, device or timeframe. This includes email, video and conference calls, social network content, blogs, audio files, images and many others; the companies can handle more than 80 difference channels.
Well-Rounded Enterprise Data Management Package
K1 is convinced that both companies fit together well enough to provide a well-rounded enterprise data management package that no one else in the market will be able to equal.
“We talked to a number of private equity and growth-equity companies, and one of those was K1 capital. The thing that differentiated them from the other parties we were speaking with was the ownership of Smarsh,” Actiance CEO Kailash Ambwani told eWEEK. “We’ve traditionally worked with larger corporations; Smarsh has been focused on the archiving space and started out in the mid-market before moving up to larger customers.
“The combination of the two companies will create a solution that will address over 100 channels of communication, including collaboration platforms, messaging platforms, mobile services and others, and offer a new-gen package in terms of archiving and retention.”
The combined company will serve more than 6,500 financial services firms─including the top 15 global banks and regional, mid-size banks and broker-dealers─as well as government agencies and organizations in other regulated industries
“This combination of capabilities from Actiance and Smarsh provides the industry with a means to get ahead – and stay ahead – of compliance trends, while introducing the latest communications technologies to increase efficiency and effectiveness in the modern enterprise,” said Neil Malik, Managing Partner at K1.
Gaps Being Found in Retention Programs
More organizations are finding that gaps in retention and supervision programs have consequences. According to a recent study of disciplinary actions from the Financial Industry Regulatory Authority, 99 books and records cases were reported in 2016, resulting in a whopping 435 percent increase in fines compared to 2015. Regulatory examinations have become more comprehensive, with more scrutiny aimed at the record-keeping and supervision of electronic communications.
More complications are coming down the pike with the introduction of the European Union’s General Data Protection Regulation (GDPR) next year. The GDPR mandates that businesses must be able to explain the logic behind artificial intelligence models using European customer data to make decisions or risk massive fines up to four percent of global revenues for non-compliance.
That regulation will go into force on May 25, 2018. Any enterprise doing business in any or all of the EU’s 28 member countries will need to comply.
Actiance is all about keeping all these records straight, safe and accessible. Smarsh is all about smart archiving and security.
Increased Investment Expected from K1
K1 has set near-term priorities to include more investment in product capabilities, increased flexibility in deployment options, accelerated expansion in Europe and development of a joint channel partner program, the company said.
“Our customers will be able to provide greater flexibility to their employees by not having to compromise on their choice of communications channels, deployment models, or compliance needs,” Marsh said. “Perhaps most importantly, organizations with legacy, on-premise capture and archiving solutions can make the overdue transition to upgraded and more modern solutions. All of this is now possible through a single provider.”
The combined organization will maintain operations in Oregon, California, New York, Massachusetts, Georgia, North Carolina, Canada, India, and the United Kingdom.