UPDATED 13:59 EDT / NOVEMBER 15 2017


Smarsh to merge with Actiance in bid to become a $100M compliance powerhouse

Managing internal communications is a tricky business for enterprises. They not only need to ensure that employees can interact with peers and outside contacts without any technical obstacles, but also store correspondences for extended periods of time to meet compliance requirements.

The market for software that can ease the latter task is quite sizable. In an effort to carve out a bigger slice of the pie, K1 Capital Management LLC today announced plans to acquire communications compliance provider Actiance Inc. The private equity firm intends to merge it with Smarsh Inc., a portfolio company that competes in the same segment.

K1 didn’t share the financial terms of the deal. However, the fact that Actiance has raised nearly $128 million from investors likely puts the price tag at quite a bit north of $100 million. For further context, the private equity firm reportedly paid $215 million to acquire Smarsh back in 2014.

The combined company is set to emerge from the merger with more than $100 million in annual revenues. Smarsh and Actiance’s soon-to-be-unified product portfolios in turn cover a wide spectrum of communications mediums ranging from email to social media. Besides archiving, their software also offers features for preventing sensitive information from ending up somewhere it’s not supposed to. 

Smarsh and Actiance’s respective tools are together used by more than 6,500 companies worldwide. Once the merger completes, the combined company will invest in developing new features (presumably, with a particular focus on integrating the two product portfolios) as well as adjust go-to-market efforts.

K1 is not new to executing such ambitious mergers. In September, the firm acquired cybersecurity provider Core Security SDI Corp. and announced plans to combine it with SecureAuth Corp., a portfolio company focused on managing access to corporate systems. K1 topped off the move by leading a $200 million funding round into SecureAuth with participation from Toba Capital.

Image: Unsplash

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