Surge PE Closes Legal Tech-Enabled Services Platform Avalon

DALLAS, October 03, 2022 — On September 30th, 2022, Dallas-based Surge Private Equity, LLC (“Surge”) closed its 11th platform investment—Avalon Document Services, Inc. (“Avalon”), a technology-enabled services company providing E-discovery, cybersecurity, business process outsourcing, and document services primarily to thousands of law firms and corporations. The transaction, valued at around $36MM, closed with debt financing provided by Woodforest National Bank’s TMT team and BakerHostetler acting as lead counsel.

Founded in 2000, Avalon has built an extensive platform with 145 employees serving clients through its eight regional offices across the country. The Company has achieved a 23% CAGR over the past 20 years without any sacrifices to profitability, both organically across all lines of business and through strategic acquisitions. Avalon’s highly integrated services, high-touch approach, and use of effective and appropriate technology help them retain an exceptionally sticky customer base. Avalon owner JP Midgley retained equity in the transaction and will remain on as a senior executive.

Sanjay Gulati, Principal at Surge, said, “We are honored to partner with JP on the next exciting chapter of this company. Avalon’s world-class management team and strong KPI systems serve a diverse customer base of over 2,400 clients. With a ~90% revenue retention rate, 92 Net Promoter Score, strong free cash flow profile, and history of sustained performance through both recessionary and COVID environments, we find the asset exceptionally attractive in these volatile times. We are eager to work with him and the company to help continue its trajectory and execute on an addon acquisition campaign.”

Kenyon Group, LLC served as exclusive financial advisor to Avalon and arranged this transaction.

About Surge Private Equity LLC

Surge Private Equity is a Dallas-based private equity firm that typically seeks majority investments in growing businesses with $2-$15MM of EBITDA. Together with its lending partners, Surge provides entrepreneurs with liquidity and investors with higher yields and greater accessibility. Surge primarily invests in companies where the seller will remain in an ongoing capacity.