Irish legal software business Brightflag is to be taken over by a dutch firm in a deal worth hundreds of millions of euro.
Wolters Kluwer Legal & Regulatory has agreed terms to buy Dublin-based Brightflag for €425 million in cash, it said in a statement on Thursday. It will use Brightflag to strengthen its presence among mid-sized law firms in Europe and the US, it added. The deal is expected to close next month and is subject to the “customary closing conditions.”
Brightflag, which was founded by Ian Nolan and Alex Kelly in 2014, uses artificial intelligence (AI) to help firms manage their legal bills as well as improve communications between companies and their outside legal teams. Its software scans invoices and other documents which can then be used to manage costs at big companies, which would typically spend millions of euro per year on legal fees.
Brightflag’s 155 staff will move to Wolters Kluwer as part of the deal.
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“Wolters Kluwer shares our vision for leveraging advanced technology to enhance legal operations, and we look forward to working with the Wolters Kluwer Legal & Regulatory team to accelerate the future of legal solutions,” said Mr Nolan, who is also Brightflag’s chief executive.
Brightflag’s revenue hit €22 million last year, according to the company. That was a 36 per cent increase on a year earlier. By last month, it had annual recurring revenue – a key performance metric – of €27 million. About 50 per cent of its business comes from the US.
The company counts the likes of Lufthansa and DropBox among its clients.
“We are excited to welcome Brightflag to Wolters Kluwer, where together we will continue to lead the way in AI-powered legal technology tailored to the evolving demands of corporate legal departments,” said Wolters Kluwer chief executive Martin O’Malley.
Mr Kelly and Mr Nolan identified a gap in the market for what became Brightflag in part through Mr Kelly’s time as a corporate lawyer with Matheson and Mr Nolan’s background as a software engineer focused on the legal industry.
“There are major pressures on legal departments to be operationally efficient like their colleagues in other areas of the business,” they said in a 2019 interview with The Irish Times, adding that it was “shocking how little the government buys from indigenous Irish technology companies.”
It had previously raised at least €30 million across three funding rounds. Most recently, it raised $28 million (€24.6 million) in 2020.
That funding round was led by One Peak Partners while previous backers Sands Capital Partners, and Dublin-based Frontline Ventures and Tribal VC also participated in the round. Sands Capital had led a funding round for the company in 2019.
