Friday, December 3

Portobello, MCH and Magnum, leaders in 2021 in operations in LegalTech companies

The data on Spanish private capital investment continues to rise and beating records in 2021. The figures managed by the Spanish Association of Capital, Growth and Investment (Ascri) reflect that investment volume in Spain reached 4,844 million of euros in the third quarter of the year with a total of 618 investments, 18.4% more than in the same period of 2020. And one of the sectors where the firms of private equity have focused in recent times is on the so-called LegalTech.

The unstoppable ‘boom’ of these companies is set by experts in 2018, a date on which, according to Forbes, they grew by 713% compared to the previous year. In Spain, the rise of these legal technology companies has not gone unnoticed and private equity companies have continued to bet heavily on them.

In 2021 there have been important operations in the Spanish LegalTech ecosystem, led by large private equity managers such as Portobello, Magnun or MCH. Accounting for the main transactions, the investment of private equity funds in Legaltech would reach a figure higher than 850 million in 2021.

Among the most noteworthy is the purchase in August by Portobello, the private equity manager chaired by Iñigo Sánchez-Asiaín, of the 80% of Legálitas for about 120 million. The remaining 20% ​​of the company was in the hands of Legálitas executives. In this operation Portobello beat out other European funds such as Bd Capital y Bridgepoint.

Another major operation this year was the sale of Lexer to Grupo BC in the first quarter of 2021. The operation, estimated at around 150 million euros, has been a great success for Magnum, the Spanish fund led by Ángel Corcóstegui.

This was not the only acquisition of Grupo BC, since in October it also acquired 100% of the company Plataforma Legal. Grupo BC, owned by the Luxembourg fund L-GAM and with a total turnover of more than 230 million euros after both acquisitions, has recently been acquired by the North American private equity giant Silver Lake, specialized in technology investments. The operation is estimated at more than 500 million euros, representing a historic milestone for the sector.

Finally, the manager also active in this sector has been MCH (led by José María Muñoz and Jaime Hernández Soto). At the beginning of the year, MCH and Ardian closed the acquisition of Logalty, a group specialized in electronic signature belonging to Cesce, the state’s credit insurer. The purchase was closed for about 70 million euros after a very competitive auction coordinated by the boutique JB Capital. This has not been MCH’s only operation in the LegalTech sector, since in June it also acquired the company RegTech Solutions to integrate it into Logalty and expand its technological solutions.

In summary, 2021 has been an important investment milestone in the Spanish LegalTech segment. These 3 large operations led by the leading private equity managers in Spain have led to the consolidation of this segment, which historically had been led by venture capital and smaller investments. The last of the Portobello of Iñigo Sanchez-Asiaín in Legálitas. As these businesses scale and continue to mature, the Spanish LegalTech will continue to gain relevance and follow the growth steps that the Spanish FinTech has experienced in the last 5 years.

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