It is unclear exactly what Kofax is planning for Equitrac and Copitrak (and eCopy). All it has said publicly is “we will now be able to combine the best capture capabilities available in the market into one product portfolio.” But this is not the first deal for Thoma Bravo, the private equity firm that funded the acquisition; this group follows a playbook.
We’ve commissioned an independent report analyzing what is likely to happen based on the private equity firm’s history. Here’s what the analyst uncovered
- Nuance actually lost money on its purchase of Equitrac. Considering the time value of money, it has sold the whole division for less than it paid for Equitrac and eCopy alone. Kofax will act very quickly to improve profitability, and it will do so by cutting costs wherever possible.
- Approximately 20 percent of the staff is likely to lose their jobs very soon. There will be high turnover among the positions that remain. This will happen quickly—the support team members you’ve come to count on will very possibly be gone soon after the deal closes.
- As Kofax intends one product portfolio, Copitrak or Equitrac is likely to be shut down soon, and the future of eCopy is unclear. Thoma Bravo has taken this step at many of its prior investments.
- There is no evidence that any sort of product road map is in place, and it is very unlikely any products will be developed or upgraded in-house. Thoma Bravo’s strategy is to acquire additional technology companies instead—in fact Nuance itself is actually an appendage of Kofax.
- Kofax leadership has basically no experience in the legal industry or with law firms. That cannot be rectified quickly.
- Thoma Bravo typically exits its investments in three years. The whole thing will be for sale again very soon.