Area companies Epiq Systems and Iris Data Services will combine
Epiq Systems, which has been under pressure from investors to boost shareholder value, on Wednesday announced an agreement to acquire Iris Data Services for $134 million.
The transaction will combine two Kansas City area companies that provide software products and other services for the legal industry.
Epiq, based in Kansas City, Kan., said it expects its purchase of Olathe-based Iris to be completed by April 30. It said the acquisition will provide it with a postclosing tax benefit of about $23 million.
Major Baisden, president and co-founder of privately held Iris, will join Epiq as managing director and will continue running Iris’ operation, currently at 17795 W. 106th St. Its European headquarters are in London.
The company has 200 employees, including 120 here.
Iris, which was founded in 2007, focuses on providing clients with managed electronic services in the legal discovery process. The company has grown rapidly in recent years with 22 multiyear contracts signed in just the last 12 months, Epiq said.
Iris’ operating revenues grew 52 percent to $38 million in 2014, and its 2014 earnings before interest, taxes, depreciation and amortization grew 42 percent to $8.2 million.
“The acquisition is a significant milestone in our growth,” Tom Olofson, chairman and CEO of Epiq, said in a statement. He said he expects the transaction to “yield numerous cross-selling opportunities between Epiq’s clients and the substantial base of new clients that we expect will augment our long-term growth.”
Epiq, which is publicly traded on the Nasdaq exchange, specializes in electronic discovery, bankruptcy, and class action and mass tort administration technology and other services. It has 1,100 employees, including 275 here.
Last year, Epiq announced it was exploring strategic options, including going private or recapitalizing to increase the company’s value after being pressured by several large shareholders.
In Wednesday’s announcement, Epiq said management and its board “remain committed to conducting a separate process to explore a full range of strategic and financial alternatives.” The company has been working with Credit Suisse Securities and Kirkland & Ellis LLP.
Epiq said its previously announced 2015 financial guidance remains unchanged, with estimated operating revenue between $465 million and $485 million.
This story was originally published April 8, 2015 at 10:09 AM with the headline "Area companies Epiq Systems and Iris Data Services will combine."