Houlihan Lokey Advises Brainspace

Houlihan Lokey is pleased to announce that Brainspace, a subsidiary of Cyxtera Cybersecurity, Inc. (d/b/a Appgate), a portfolio company of BC Partners and Medina Capital, has been acquired by K1 Investment Management, LLC (K1) in an all-cash transaction. Simultaneous to the acquisition of Brainspace, K1 acquired Reveal Data from Gallant Capital and is merging Brainspace and Reveal. The combination creates an industry-leading AI-powered data discovery software solution that serves major corporations, governments, and legal service providers in complex litigation, regulatory compliance, and other mission-critical data management tasks. The transaction closed on January 20, 2021.

Brainspace is a leading data analytics platform in the legal technology space, providing eDiscovery, information governance, and compliance software to its clients. The company serves many of the world’s largest legal service providers, law firms, and Global 1000 enterprise companies. Its platform enables legal and compliance organizations to find better-quality insights faster when reviewing documents with machine-learning-powered search and visualization capabilities. Brainspace was acquired by BC Partners and Medina Capital in 2018 and merged with a data center business called Cyxtera.

Reveal Data is a legal technology company that develops and provides document analytics, online document review, and project management software in a single platform to the legal industry's litigation market. It has been backed by Gallant Capital, a Los Angeles–based fund founded by Jon Gimbel and Anthony Guagliano.

In less than six months, NexLP and Brainspace, the two leading AI solutions in eDiscovery, have both joined forces with Reveal, creating a combined software solution that offers customers a “single pane of glass” for all eDiscovery needs, allowing clients to manage data, control costs, and extract key insights from one platform—an experience unrivaled in the industry. Clients will now have access to the entire suite, including Reveal’s industry-leading processing, early case assessment, and AI and review functionality as well as Brainspace’s best-in-class data analytics engine.

K1’s investment will be used to fuel growth in both businesses, including expanding the sales and marketing teams, building additional functionality in both product sets, and hiring within professional services, customer support, and customer success to augment the client experience.

The strategic merger of Reveal and Brainspace is another significant chapter in each company’s growth story, with the combined company becoming the largest legal-focused AI provider globally. Customers include leading legal service providers, law firms, corporations, and government agencies around the globe.

K1 is a Manhattan Beach, California–based investment firm focused on high-growth enterprise software companies globally. Founded in 2011, K1 seeks to help dynamic businesses achieve successful outcomes by identifying and executing organic and acquisition-based growth opportunities that position its companies as industry leaders. K1 typically invests alongside strong management teams that continue to guide their organizations on a day-to-day basis.

Houlihan Lokey served as the exclusive financial advisor to Appgate and assisted in marketing, structuring, and negotiating the transaction on behalf of the company.