Silver Lake to Invest in Legal-and-Compliance Software Firm Relativity

Below is an article originally written by Miriam Gottfried and published by Wall Street Journal on March 18, 2021. This article is about PowerToFly Partner Relativity. Go to Relativity's company page on PowerToFly to see their open positions and learn more.

Private-equity firm Silver Lake is making a big investment in legal-and-compliance technology company Relativity ODA LLC, company officials told The Wall Street Journal.The deal, which is expected to be announced later Thursday, values the software maker at about $3.6 billion, including debt, and will make Silver Lake its largest shareholder, according to people familiar with the matter.

The companies aren't disclosing the size of the Silver Lake investment, but said the private-equity firm will take seats on Relativity's board.

Chicago-based Relativity's software has primarily been used by the legal industry to sift through massive amounts of data in discovery, as the process of gathering information used as evidence is known. It has more than 300,000 annual users in 49 countries.

Relativity Chief Executive Mike Gamson said Relativity plans to use the investment from Silver Lake to continue to expand its core business and improve the artificial-intelligence technology used in its communication-surveillance product.

The company, which currently counts law firms, government agencies, corporations and financial institutions among its clients, also hopes to expand the market for its products to include organizing other large blocks of unstructured data.Silver Lake is joining a shortlist of existing shareholders including Relativity's founder and executive chairman Andrew Sieja and the growth-investing arm of Iconiq Capital LLC.

Relativity's origins date back two decades to when Mr. Sieja started a small software-consulting firm. The firm increasingly began working for law firms, eventually leading it to create its current product. At the time, discovery was transitioning from processing written documents to digital files, and the volume of data was skyrocketing.

Data volume has continued to surge, and the number of sources has also multiplied. For example, communications through the popular Zoom Video Communications Inc. and Slack Technologies Inc. platforms must now be sorted, along with emails and documents.

"As the world has proliferated the number of data sources, so has Relativity grown to be able to process that," said Mr. Gamson, who took over from Mr. Sieja as the company's chief executive in 2019. "We can really scale with the way data needs have scaled.

"The investment is the latest in a burst of deal activity from Silver Lake since the coronavirus pandemic began.With more than $79 billion in combined assets under management and committed capital, the firm has a longstanding playbook of taking big stakes in technology companies and working closely with their founders or management to help spur growth.

In September, for example, it led a group that invested $650 million in Swedish payments company Klarna Holding AB.

In January, Silver Lake completed fundraising on a new $20 billion flagship vehicle. The firm is also launching a new long-term investment strategy, anchored by a $2 billion commitment from Abu Dhabi sovereign-wealth fund Mubadala Investment Co.