BUSINESS DESCRIPTION

Mitratech is a leading global provider of enterprise legal management (‘ELM’) software to corporate legal departments.The core product is Matter Management software which acts as the Enterprise Resource Planning software at the heart of in‑house legal teams, and an e-billing solution which provides e‑invoicing capabilities between law department and external counsel with automatic invoice review.

Mitratech serves a wide customer base of c. 1,000 corporate customers across the world, including 40% of the Fortune 500. Over 650 law firms are using the e-billing platform to transmit invoices to clients, including all of the AmLaw 200 and 99% of the Global 100 Law Firms. The company is based in Austin, Texas with further offices in the US, England, Wales and Australia, employing c. 370 people.

WHY DID WE INVEST?

Legal process and regulatory compliance software is a core HgCapital sector, and one we have invested in before and are currently invested in through STP, which supports insolvency processes and mid‑market practice management in the DACH region of Europe.

HgCapital’s TMT team have looked at many targets in this fragmented sector, however, Mitratech is one that is sufficiently large and attractive as a standalone investment. We see Mitratech as the best placed platform to drive a global sector roll‑up.

How do we intend to create value?

HgCapital intends to support Mitratech through both continued organic growth of the business and as the best placed platform to drive a global sector roll‑up. The business has a strong management team with a best‑in‑class core product taking share from weak competition in a growing market. Mitratech has a proven track record of organic growth and we will look to add to this through M&A.

WHAT HAS BEEN ACHIEVED?

HgCapital is working with the management of Mitratech to source M&A opportunities in HgCapital’s core markets of Western Europe. HgCapital’s Operational Innovations team is working with management on the proposition and pricing in particular for the e‑billing products.

HOW IS IT PERFORMING?

It is early in the investment period; however, the company is performing well, with double‑digit EBITDA growth over the last twelve months. The business has been valued slightly below the original investment cost, due to the unfavourable translation effect of currency movements.

HOW WILL WE CRYSTALLISE VALUE?

We believe Mitratech will present an attractive acquisition target to a number of trade acquirers in the Legal, Enterprise Content Management (‘ECM’) and Governance Risk and Compliance (‘GRC’) sectors where its position as the leading ELM vendor holds high strategic value.

Equally, we expect that Mitratech will continue to be attractive to Private Equity buyers given high organic growth, recurring revenue, EBITDA margins and market position.

Sector Location Date of Investment Residual cost £’000 Unrealised Value £’000
TMT North America April 2017 22,258 21,263