Legal sector DMS market leader Interwoven has just announced that it has entered into a definitive agreement to acquire Discovery Mining, a leading e-discovery provider to professional services firms and corporations. Discovery Mining significantly streamlines and simplifies the discovery phase of litigation and investigations with a software-as-a-service (SaaS) solution for processing, reviewing and producing massive volumes of electronic data.

Under the terms of the agreement, Interwoven will pay approximately $36 million in cash for all outstanding shares of Discovery Mining (which was founded in 2002) and vested stock options, and assume certain existing employee stock options. While the acquisition is expected to be completed in the third quarter of 2008, the transaction is subject to customary closing conditions.

Commenting on the deal Interwoven CEO Joe Cowan said “The acquisition of Discovery Mining is consistent with that focus, as e-discovery has become an absolutely vital – yet challenging – component of the litigation process. We plan to leverage our market experience to bring leadership to what is today a fragmented market for e-discovery.”

Most organizations do not have the infrastructure to handle large volumes of information, and are turning to companies like Discovery Mining to manage the e-discovery process for them. According to a recent report by Forrester Research, the North American e-discovery market, which in 2006 was $1.45 billion, will grow to almost $4.89 billion by 2011 – an increase of 238 percent in five years. In the 2008 Socha-Gelbmann* Electronic Discovery Survey, Discovery Mining was ranked by law firms as a top five provider of e-discovery services. It has worked with more than half of the Am Law 100 firms, as well as a number of Fortune 500 corporations. Key Discovery Mining clients include DLA Piper UK LLP, Greenberg Traurig LLP, Holland & Knight, Morrison & Foerster LLP, and Weil Gotshal & Manges LLP.

Discovery Mining’s highly scalable e-discovery service is optimized for the processing and review of massive volumes of electronic data. The service features powerful capabilities for accelerated review, including concept searching, clustering, analytics and email filtering. As a result, organizations can improve the productivity of reviewers, make more effective assessments and meet the pressing deadlines of litigation and investigations with greater predictability.

* The Orange Rag will be publishing a separate story on Socha Gelbmann 2008.