Author: Kelsey Kovachik
Alon Sheinberg Joins as a Director
Alon Sheinberg Joins as a Director
JEGI LEONIS, a pre-eminent M&A advisory firm for the global media, marketing, information and technology industries, headquartered in New York, NY and London, UK, is pleased to announce that Alon Sheinberg has joined the firm as a Director. He will advise clients on mergers, acquisitions, divestitures, and capital raises with a focus on the technology, digital media, and marketing services sectors.
Prior to JEGI LEONIS, Alon built a strong track record of transaction execution, advising companies across a range of technology sectors, including digital media, marketing, EdTech, IT consulting, and software/SaaS. He has successfully completed over 50 transactions, working with leading financial sponsors and strategic acquirers. Alon holds an MBA from the Gies College of Business at the University of Illinois, and a BA/MA in Political Science from Tel-Aviv University. He is also a registered FINRA representative.
Commenting on his new role, Alon said, “I am thrilled to join the team at JEGI LEONIS and contribute to the firm’s commitment to excellence through meticulous transaction execution. JEGI LEONIS’s unmatched industry relationships, extensive leadership experience, and longstanding presence in the media, marketing, information and technology sectors, set it apart in today’s investment banking landscape. I look forward to leveraging my experience to drive exceptional outcomes for our clients as we enter a favorable M&A environment, with market dynamics creating significant acquisition opportunities.”
Doug Stowe, President & COO of JEGI LEONIS, noted, “We are very pleased to welcome Alon to our team. He has a successful history driving outstanding outcomes on behalf of his clients. His knowledge and expertise covering the software, technology, digital media, and marketing services sectors will be highly valuable to our firm and its global network of buyers, sellers and investors.”
Executive Leadership Dinner
Executive Leadership Dinner
Location: The Pierre, New York City
Partner: CIL (www.cil.com) & BDO (www.bdo.com)
JEGI LEONIS held its last Executive Leadership Dinner of 2024 on November 7th at the Pierre in New York starting at 6PM with cocktails. These events are structured as roundtable discussions and provide a stimulating evening of great conversation and networking.
This dinner, hosted in partnership with CIL and BDO, brought together 35 senior executives from the Digital Marketing Services industry. Attendees discussed trends affecting the industry, market conditions, M&A outlook and more, as outlined in the recent report we co-published with CIL. To download the report please visit: https://staging.jl-co.com/u-s-digital-marketing-services-the-investment-opportunity/
Scott Mozarsky comments on the legal market
Scott Mozarsky comments on the legal market
Below is an excerpt from an article originally posted on Law.com, titled “The Newest Law Firm Partner: Private Equity.” To read the full article please click here.
“It’s easy to imagine why a law firm lacking the balance sheet to win talent battles might desire an infusion of capital to bolster its competitiveness. But why would this new focus on talent in the legal asset class appeal to investors? Scott Mozarsky, Managing Director at JEGI CLARITY, cites a confluence of factors.
First, regulatory changes and transactions in adjacent sectors have opened investors’ eyes to law firms as an untapped market. “Arizona’s decision to liberalize Rule 5.4 has been a catalyst for investors to take a harder look at the art of the possible relating to investments in law firms,” said Mozarsky. “The recent wave of successful roll-ups in accounting and tax advisory, which have been executed using MSOs, has also been a strong driver. Investors are realizing that the law firm market is larger than they had imagined: it’s a very profitable and scalable business that can benefit from pattern recognition and perspective of financial sponsors. And the multiple private equity-backed roll-ups in accounting, which has similar ethics and regulatory rules to the legal market, are highly relevant proxies.” Mozarsky believes legal talent as an asset class would meet an investor base that is already primed to pursue legal sector deals.
Second, as compared to litigation finance opportunities currently available to institutional investors, legal talent could offer a less risky return profile. Rather than sharing in the return on a subset of a practice group’s matters, a capital provider facilitating the hiring of a group would ultimately be able to benefit from the group’s revenue pool as a whole. This has the potential to appeal to investors seeking a relatively more predictable, private equity-like return. In addition, legal talent investing would offer exposure not only to litigation but to transactional and regulatory practice areas as well.”
Greens Ledge Lighthouse Charity Fundraiser
Greens Ledge Lighthouse Charity Fundraiser
JEGI LEONIS, in partnership with the sponsors below, hosted a special networking charity event at the newly-restored Greens Ledge Lighthouse in Rowayton, CT. This 3rd annual event brought together senior executives in CT and the broader NYC metro area. All proceeds went to the Greens Ledge Light Preservation Society, a 501(c)3 dedicated to restoring and preserving the historic Greens Ledge Lighthouse. To learn more about the efforts to save the lighthouse please visit https://savegreensledge.org/.
Founding Sponsors
Event Sponsors
U.S. Digital Marketing Services | The Investment Opportunity
U.S. Digital Marketing Services | The Investment Opportunity
The U.S. digital marketing services industry faced challenges in 2023, but it has seen a return to optimism in 2024. Agencies are pursuing M&A, building integrated capabilities, and leveraging AI and data analytics to drive growth and benefit from underlying market tailwinds.
JEGI LEONIS and CIL have conducted a survey of leading independent businesses across the U.S. digital services market to understand their outlook for 2024-25 and what opportunities they see for the year ahead.
The survey focused on three areas:
- Market conditions: How demand for services has changed in H2 2023 and H1 2024, and likely areas for growth into 2025.
- Industry trends: Specific initiatives digital marketing agencies are taking to drive top-line and bottom-line growth and benefit from market tailwinds.
- M&A outlook: Which areas are going to be the focus for investment and the outlook for M&A.
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In 2023, there were aggressive rate raises and recession fears. People did not know where the economy was going. Now that rates have stabilized, clients are in a position of lower risk and are more willing to open up their marketing budgets.
If you would like an in depth discussion on this topic please contact us. If you have any issues receiving the report, please contact Kelsey Haar at khaar@JL-co.com.
The Legal Tech Market
The Legal Tech Market
At JEGI LEONIS, we have observed strong growth across the majority of subsegments of the legal sector, including litigation support; the market segment for our two latest deals, the sale of litigation support services provider First Legal to Aurora Capital Partners and the sale of Counsel Press to Align Capital Partners. The litigation subsegments of the Legal Tech and tech-enabled services market have an aggregate TAM of over $50B which includes eDiscovery, litigation support, legal research, legal practice management software and litigation workflow platforms.
The Legal Tech market’s growth is driven by technological disruption, increased access to capital and the emergence of alternative business models. These factors are creating a fertile environment for investors and expanding deal opportunities in the market.
Market Drivers
2023 marked a year of solid growth for Artificial Intelligence (AI), with Generative AI becoming more mainstream. While 2023 focused on theoretical advancements and proofs of concept, 2024 has seen the emergence of tangible AI applications and their integration into organizational operations. Although AI’s impact on the legal industry will be profound, it is still early. AI is maturing and evolving every day.
As AI adoption has increased, several companies and financial sponsors have focused on leveraging AI to differentiate tech-enabled service offerings, which in some instances is enhancing value and profit margins in what historically were commoditized markets.
AI has served as a catalyst for technological innovation in the sector. This innovation includes AI generated transcriptions for court reporting and depositions and workflow improvements relating to document automation. AI is also being used to highlight inconsistencies in testimony in real-time during hearings and depositions for attorneys to enable them to better serve their clients. Another area that is gaining momentum is law firms leveraging AI for predictive analytics relating to likelihood of winning cases and size of potential settlements and damages awards.
The alternative legal services provider market segment continues to exhibit solid consistent growth driven by increased adoption by law firms and in-house groups. Investments in legal operations, technology as well as Legal Process Outsourcing (LPO) and Business Process Outsourcing (BPO) providers have generated strong momentum over recent years.
The recent loosening of restrictions on nonlawyer ownership of law firms under Rule 5.4 in Arizona and Utah has also stimulated activity and served as a catalyst for financial sponsors to come into the market. Some financial sponsors are deploying capital into law firms through managed services organizations similar to the patterns we have seen in the medical, dental, and tax & accounting verticals.
M&A Overview
Despite a choppy M&A market in 2023, the legal market was highly active for tech-enabled services deals, particularly in litigation support. Notable deals included the sale of JEGI LEONIS-advised Counsel Press to Align Capital Partners with the shared vision of building a diversified litigation support platform, as well as Gridiron Capital acquiring Esquire Deposition Solutions, Veritext acquiring Litigation Services and GCP Capital Partners acquiring KCC. Other legal market tech-enabled services sub-segments were also quite active including legal process outsourcing led by Consilio’s acquisition of Lawyers On Demand, and business process outsourcing led by Renovus Capital continuing to create a market-leading global platform at Harbor Global.
Legal software market deal activity was less consistent in 2023. That said, several marquee businesses were acquired at strong valuations including, among others, Casetext, Fastcase, Aosphere, Elite, Litify and Cipher. While the broader software market has not come back to the same consistent levels of activity and high valuations that we saw in 2021, quality businesses in the legal market are trading for strong valuation multiples.
We anticipate this trend to continue into 2024 and beyond.
2024 has seen multiple subsectors experiencing heightened M&A activity including litigation support, claims administration, alternative dispute resolution, legal process outsourcing, eDiscovery, and IP management. A consistent theme in the deals that have closed and the other deals in market is a focus on leveraging technology and AI in particular to drive better results and efficiencies.
The Legal Tech and tech-enabled services market has shown resilience amid recent broader market pressures. In 2024 its trajectory continues to accelerate, fueled by technological disruption, increased access to capital from financial sponsors, and growing adoption of legal and business process outsourcing by law firms and corporations.
Scott Mozarsky, Co-CEO & Managing Director, JEGI LEONIS
Executive Leadership Dinner
Executive Leadership Dinner
Location: The Pierre, New York City
Partner: BDO (www.bdo.com)
JEGI LEONIS held its first Executive Leadership Dinner of 2024 on July 24th at the Pierre in New York starting at 6PM with cocktails. These events are structured as roundtable discussions and provide a stimulating evening of great conversation and networking.
This Dinner was titled “The Opportunity in B2B Data & Information.” The roundtable discussion was led by Matt Reilly, President & CEO of Fusable, who shared his perspectives on the evolving B2B data landscape, the impact of AI on the industry, and trends affecting the market.
The Dinner brought together approximately 35 senior executives from a mix of large global corporations and emerging companies.
The Marketing Services M&A Market is poised for a return
The Marketing Services M&A Market is poised for a return
We are anticipating a significant rebound in M&A activity for the Marketing Services sector as we enter the back half of 2024. Supported by our recent Digital Services market studies in Europe and North America, where we interviewed executive leaders at global independent digital services companies, as well as recent signs of broad recovery in global M&A activity.
Transaction activity in Q2 2024 shows an 11% increase from Q1. In Q2 2024, 424 transactions were completed globally, up from 383 in Q1 2024. This rise is particularly significant as Q1 marked the eighth consecutive quarter of decline from a peak of 617 transactions in Q1 2022.
*Source: Pitchbook Financial Database
Within the Marketing Services sector specifically, our recent engagements and pitches indicate robust activity for Q4 2024, with the potential to return to recent peak volumes in the first half of 2025. This optimism is shared by many in the industry, reflecting a broader sentiment of recovery.
Factors driving this positive trend include the following:
- Decline in inflation and interest rates: Declining inflation and the anticipation of interest rate reductions are primary influences, which in turn are easing debt markets and facilitating transaction activity.
- Recovery of marketing budgets: Marketing budgets are bouncing back faster and being deployed more rapidly, improving visibility, and leading to the majority of agency CEOs interviewed anticipating stronger performance in the second half of 2024.
- Backlog of companies seeking an exit: Several Private Equity-backed Digital Services platforms are eyeing an exit after delays of up to 24 months, with many waiting for three to four quarters of robust growth as a trigger to launch a process.
- Olympics and U.S. Presidential Election: Notable spending attached to the Summer Olympics and anticipated windfall of political budgets will create additional momentum.
- Operational efficiencies beginning to be felt with AI: The adaptation of AI as an efficiency tool across disparate operational functions from Enterprise to SMB businesses are beginning to be realized.
As we navigate this dynamic landscape, the groundwork is being laid for sustained recovery in Global Marketing Services M&A activity, reflecting renewed business confidence and economic stability.
If you would like to speak to us about this topic or the broader market, please contact us.
European Digital Services Market | The Investment Opportunity
European Digital Services Market The Investment Opportunity
While the digital services industry faced challenges in 2023, there are signs for recovery and growth in 2024, with a focus on building integrated capabilities, leveraging AI, and driving scale via M&A.
JEGI LEONIS and CIL have conducted a comprehensive survey of leading independent businesses in the European digital services market to understand their outlook for 2024 and what opportunities they see for the year ahead.
The survey focused on three areas:
- Market conditions: how demand for services has changed in 2023 and likely areas for growth in 2024.
- Industry trends: how margin dynamics have impacted group structures and which trends are having the greatest impact.
- M&A outlook: which areas are going to be the focus for investment and what
is the outlook for M&A.
While the digital services industry faced challenges in 2023, there are signs for recovery and growth in 2024, with a focus on building capabilities, leveraging AI, and driving scale via M&A.
If you would like an in depth discussion on this topic please contact us.