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Double acquisition creates new big player in legal IT

Sawers: We are not going to be a quiet player in the market

Hugely acquisitive IT company the Access Group has blown into the legal market by adding DPS Software to its purchase last month of Eclipse Legal Systems, with more deals to come.

Doug Sawers, managing director of Access Legal, said he expected the division to double in turnover to £40m in the next three years through a mixture of organic growth and acquisitions.

Access said it already had around 2,500 legal clients – law firms, in-house teams and local authorities – through its HR, payroll and other back-office services, but last year decided to target the legal market ‘vertical’.

It entered the market in a relatively small way last year by acquiring online legal compliance business Riliance and legal training company Socrates, but said the two deals done over the past month made it one of the top three legal software suppliers. Targeting firms with 10-500 employees, Access now has more than 3,500 legal clients.

DPS provides SaaS-based practice management software, while Eclipse’s case and practice management system, Proclaim, has more than 900 customers.

Access UK is a private company with investment from TA Associates and Hg, and Mr Sawers said its turnover had increase 10-fold over the past decade to more than £300m through an aggressive acquisition strategy – it completed 10 deals last year, and seven the year before. It aims to serve the SME market.

Mr Sawers said Access aimed to replicate its approach to other sectors – such as hospitality, recruitment, health and social care, and education – by building a suite of “mission-critical applications” that customers can use.

“We don’t want to go into legal sector and be a silent or quiet player,” he said.

The values of the deals have not been disclosed, although Capita, the listed business that sold Eclipse, said the agreed consideration “reflects an enterprise value of £56.5m on cash and debt free basis, which represents a multiple of 14.1 times Eclipse’s adjusted earnings before interest, tax, depreciation and capitalised development costs”.

Eclipse’s statutory profit before tax for 2019 was £5.5m.

Last year’s announcements said Riliance had a turnover of more than £3m and more than 1,200 clients – ranging from Clifford Chance to Co-operative Legal Services – while Socrates was part of Unicorn, a group with revenues exceeding £10m that also served other sectors.

DPS founder and chairman Osman Ismail said they chose Access over several other bidders because of the opportunity to collaborate “and make a better product overall”. He stressed that he and other senior managers were remaining with the company.