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Gryphon Investors said Friday it has agreed to acquire a majority stake in New York legal staffing company Update Legal. While financial details were not disclosed, San Francisco-based Gryphon generally invests $25 million to $75 million of equity in its deals and Update Legal has more than $100 million in revenue. Chicago’s Madison Capital Funding LLC is providing senior debt, while New York’s Brown Brothers Harriman & Co. is providing mezzanine debt. Executives from Update Legal did not return calls by press time. In a statement, Update chief executive Joshua Schott said, “Gryphon’s strategic focus on strong franchises with commitments to quality matches very well with us.” Gryphon’s financial support, he said, will provide additional opportunities for Update to accelerate its growth. Founded 35 years ago, Update Legal has 100 employees and says it has placed more than 75,000 professionals in temporary and permanent positions for its clients. The company, which places both attorneys and paralegals, has offices in Boston, Dallas, Houston, Los Angeles, New Jersey, New York, Philadelphia, San Francisco and Washington. Nick Orum, a partner at Gryphon, said an effort by law firms and internal corporate legal departments to reduce their costs is fueling growth in the legal staffing industry. An increase in financial dealmaking is also contributing to the use of legal staffers, he added, which provides another source of business for Update’s personnel. “M&A activity, which had fallen in the first part of this decade, has increased in the last several years, and we expect it to increase going forward.” In addition to Orum, who led the deal for Gryphon, the firm’s deal team included partners R. David Andrews and Williard Lynn. Schott, who joined the company in 1990, will remain CEO. No other management changes are expected. Kirkland & Ellis partner David Breach is counsel to Gryphon, while Tannenbaum Helpern Syracuse & Hirschtritt partners Joel Klarreich and David Kolodny were counsel to Update. Houston investment bank De Bellas & Co. provided financial advice to Update. Update will likely expand through acquisitions of complementary businesses and by opening new offices, according to Orum. In addition, the company plans to expand its new graphics staffing business, which serves advertising companies and corporations. The acquisition is Gryphon’s second of a staffing services business. In August 2004 it partnered with former Spherion Corp. CEO Ray Marcy to acquire Arlington, Texas-based Nursefinders Inc., one of the largest nurse staffing companies in the U.S., for undisclosed terms. Copyright �2005 TDD, LLC. All rights reserved.

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