Our friends at ApogeeLegal recently announced their second extraction pack based on Seal – this time for M&A diligence.
Extraction Packs are encrypted sets of discovery and analysis components that are tailored by our partners to address specific market requirements – in this case M&A. Extraction Packs infuse our machine learning (ML) models and Natural Language Processing (NLP) capabilities with the domain expertise of our partners to provide turnkey modules that shorten the time and lower the costs to find contracts and extract specific data elements.
ApogeeLegal’s team has extensive experience in M&A deals, and they’ve packaged that domain expertise in their new offering. Their new extraction pack is called M&A² and is a proprietary analytics package that automates a large part of the merger and acquisition contract diligence process. The team ApogeeLegal describes their experience in the contracts diligence process as largely paper-based, and working with clients who were focused on a relatively narrow range of common elements and questions including:
- Change of control and assignment
- Renewal and cancellation rights
- Exclusivity, rights of first refusal and “most favored” status
- Restrictive covenants (non-solicitation and non-competition)
Of course these items would be critical to know about when acquiring a new company, as they would directly affect business relationships, business process, and ultimately company value. But, ApogeeLegal knew there were other critical elements in contracts that were usually not analyzed, due to either no budget or time to search and review them. These include cyber-security provisions, FCPA compliance, carve-outs from limitations of liability, unique insurance requirements, regulator rights, etc. These elements in contracts have the potential to significantly impact exposure, risk, and valuations and are usually just dealt with after the transaction closes. We refer to this as the “morning after” work by the Legal Ops team after the deal and the celebratory toasts are done.
With the M&A² solution from ApogeeLegal, the up-front discovery is more thorough. Organizations considering an acquisition can use the capabilities of Seal’s discovery and analytics platform with Apogee’s M&A domain experience in the form of their M&A² policies. This enables clients and counsel to review every contract for items like cancellation and change of control, but also numerous other clauses that will impact transaction risk and impact valuation, and do it faster and at a lower cost than manual reviews. This means organizations have a better understanding of what they are buying in advance, eliminate the acquisition hangover, and save money as well.
We are thrilled to have partners like ApogeeLegal, and also that they again chose Seal for their M&A² solution. They are even hinting at more function-specific extraction pack solutions coming out in the near future, which brings significant value to our joint customers.