US-based private equity (PE) firm TPG has stepped into the legal tech market. The firm announced on Tuesday that it’s acquiring a majority stake in Elite — Thomson Reuters’ “vendor of business management software for law firms” — from the multinational data and information provider. The transaction saw Elite valued at USD 500 million. It’s expected to close in Q2 2023, subject to regulatory approval.
Moving forward, Elite will operate as a standalone business. The acquisition will allow it to work “with greater focus” and provide additional resources and expertise, TPG noted. Thomson Reuters will retain a minority stake in Elite and have board representation, as well as supporting the company with its legal information products, Reuters noted. Elite will also remain integrated with other Thomson Reuters products.
Elite provides business management solutions to law firms, with its best-known products being the tools 3E and ProLaw. These consist of legal practice and financial management software specifically designed for law firms — to increase efficiency and profitability.
This is TPG’s first investment in the legal tech space. “We believe the legal industry is a market that is undergoing digital transformation, and Elite partners with leading firms on that journey,” TPG Partner Tim Millikin was quoted as saying in a company press release.
The PE’s firm’s majority acquisition of Elite shows it’s continuing a trend of entering a new sector by investing in a well-established market giant. Since its 1992 founding, TPG has built a portfolio spanning multiple industries, including healthcare, digital media and information technology. Previous acquisitions include a majority stake in McAfee and a stake in Dell subsidiary Boomi. Elite is expected to welcome its new status as an independent company, which may give it more direction than it’s seen recently. Some of Elite’s 400+ employees have previously expressed concerns about the slow pace of progress within the company. We may expect these worries to be addressed with TPG’s investment.
Authors: Vojislav Bajić, Lucy Marx