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UK law firm Allen & Overy is selling its legal tech business aosphere to private equity, the latest in a series of deals between large corporations and investment groups.
The transaction, which involves UK private equity firm Inflexion and US investor Endicott Capital taking stakes in the business, values aosphere at more than £200mn, according to a person familiar with the details. Allen & Overy will retain a minority interest in the company.
The decision to sell stakes to private equity comes as Allen & Overy continues to reshape its business following its decision to merge with New York law firm Shearman & Sterling, in what is one of the legal industry’s largest-ever tie-ups.
Founded in 2002, aosphere is an online legal services provider that offers risk management and data products to clients including banks and asset managers.
The business, which employs a team of lawyers, helps its clients manage data privacy and shareholder disclosure obligations, among other things, by providing online legal analysis on a subscription basis.
The cash injection from private equity will be used to help aosphere expand into other markets including the US, both organically and through pursuing new deals, as well as launch new product lines.
“The sector is one we’ve tracked for some time as heightened regulatory scrutiny and complexity have led to growing demand for efficiency and thus outsourcing,” said David Whileman, a partner at Inflexion, in a statement announcing the deal.
Wim Dejonghe, senior partner at Allen & Overy, said: “Inflexion is a world-class partner and we look forward to working with them and the Endicott team to support aosphere’s continued success and growth.”
Allen & Overy is following other businesses in taking private equity money to help expand non-core units while retaining a stake to benefit from any upside.
In July, US private equity group GTCR announced a deal to buy a majority stake in Worldpay from FIS in a deal valuing the company at $18.5bn. FIS retained a 45 per cent stake in the business.
Last year, First Abu Dhabi Bank sold its payments unit to Canadian asset management firm Brookfield in a deal where the bank retained a large minority stake in the company.
Multinationals including Nestlé and PepsiCo have also sold off parts of their businesses to private equity while retaining stakes in the joint ventures.
Inflexion is investing through its “partnership capital” strategy, which buys minority stakes in companies.
The firm has previously partnered with FTSE 100 company Informa to create a new financial data business by merging a unit carved out of Informa with another business.
Endicott, which invests exclusively in information services companies, will also be acquiring a minority stake.
The news comes weeks after Allen & Overy’s partners voted through the Shearman & Sterling merger. It is set to complete in May next year and will create a firm with $3.5bn in combined revenues and nearly 50 offices around the world.
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