The $13-billion financial news and business information provider, Thomson Reuters, is gearing up to get a piece of the fast-growing Legal Process Outsourcing market with the acquisition of Pangea3. The LPO industry, a sub sector of the Knowledge Process Outsourcing (KPO) industry, is growing at more than 20 per cent annually and projected to exceed $1 billion this year.

Pangea3 founded in 2004 by David Perla and Sanjay Kamlani with over 200 clients in the US and UK provides services like patent analytics and patent prosecution services, legal research, business and competitive intelligence services, commercial contracting and licensing services among others.

Proservartner Point of View: With revenues of circa $25 million, and 650 employees in New York, Mumbai and New Delhi, in a growing market (Legal Process Outsourcing) with existing private equity investment Pangea3 was an attractive acquisition target. Media reports suggest the cost was at $35 - $40 million which at the low end would equate to $53,850 per FTE.

This may seem high but given the higher margin work carried out in LPO, the growth prospects of the market (estimated to be $17 billion by 2013-14), and the opportunity that the company will have to sell information, software and workflow solutions to legal professionals, this is a reasonable price. The weight and brand of Thomson Reuters will carry them far in the market, and expect the growth of Pangea3 to increase substantially given this backing!

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