Unexpected partners in e-discovery dance

Contact: Brenon Daly

After a flurry of more than a half-dozen e-discovery acquisitions from mid-2007 to mid-2008, deal flow has dried up in the sector. Buyers during the active period included companies that, broadly speaking, have an interest in storing, managing and searching electronic information, including such tech giants as Seagate Technology, Iron Mountain and Autonomy Corp. Collectively, spending on all the e-discovery deals in that one-year period topped $800m.

And then, like the rest of the M&A market, e-discovery activity dropped off dramatically. In this vacuum, rumors started bouncing around. The main one, which we noted last October, had Symantec looking closely at Kazeon. The two companies have been partners for a year, with Kazeon able to integrate with Symantec’s Enterprise Vault and Enterprise Vault Discovery Accelerator. (We also did a broader matchmaking report on the sector right around that time.)

And while a pairing between Kazeon and Symantec may well have made sense, the e-discovery vendor ended up selling to EMC on Tuesday. (Terms were not disclosed, but one report put the price at $75m. We think that may well turn out to be a bit higher than the amount EMC actually paid, particularly since we understand that Kazeon was only running at about $10m in sales.) So we were a bit off on our pairing for Kazeon, just as we were off on our assumption that EMC would reach for its longtime e-discovery partner, StoredIQ. Undeterred by that, we find ourselves nonetheless wondering if StoredIQ will end up at Symantec. There’s certainly some logic to that pairing. But then again, that was also true for the other deals we came up with that never got signed.