DocuSign announced its intent to acquire the contract analytics and AI technology provider Seal Software for $188 million in cash. The deal reflects the increasingly important role that artificial intelligence (AI) will play in digital document management.

The news builds on the existing relationship between the two companies. DocuSign already resells Seal’s flagship analytics and machine learning application as part of the DocuSign Agreement Cloud—its suite of applications and integrations for automating and connecting the entire agreement process. DocuSign also made a strategic investment in Seal in March last year.

With the acquisition, DocuSign can integrate Seal’s technology and value proposition more comprehensively across the Agreement Cloud—and therefore deliver greater value to companies looking to prepare, sign, act-on and manage the agreements that are critical to their business, the company said.

Founded in 2010, Seal is recognised as one of the pioneers in AI-driven contract analytics. Its technology can rapidly search large collections of agreements by legal concepts (rather than just by keywords); automatically extract and compare critical clauses and terms side-by-side; quickly identify areas of risk and opportunity; and deliver actionable insights that help solve legal and business challenges.

“As the Agreement Cloud company, DocuSign is about digitally transforming the very foundation of doing business: agreements and agreement processes,” said Scott Olrich, DocuSign’s COO.

“We believe that AI will play a vital role in this transformation. And by integrating Seal into DocuSign, we can benefit from its deep technology expertise and its broad experience applying AI to agreements.”

John O’Melia, Seal’s CEO, added that this news both validates and extends the company’s founding vision.

“We have a natural synergy with DocuSign, and our team is excited to leverage our AI expertise to help make the Agreement Cloud even smarter. Also, given the company’s scale and expansive vision, becoming part of DocuSign will provide great opportunities for our customers and partners.”

Once the acquisition has closed, DocuSign will continue to sell Seal’s analytics application. It will also integrate and leverage Seal’s AI technology to augment DocuSign CLM, one of the market’s leading contract lifecycle management solutions.

This will help DocuSign CLM to automatically categorize clauses, extract their key terms, and then use that information to drive workflows—for example, automatically routing content to specific reviewers based on risk analysis and corporate policies.

For DocuSign customers, these capabilities will mean faster, more efficient agreement processes. Seal customers will in turn benefit from deeper access to the full capability of the DocuSign Agreement Cloud—especially document generation and advanced workflows.

Beyond CLM, DocuSign expects Seal’s technology to make the AI foundation of the Agreement Cloud smarter too. Built in part by DocuSign’s acquisition of technology from machine-learning startup Appuri in 2017, that foundation supports features like auto-tagging that are already offered today.

These auto-tagging tools use AI to automatically detect where to put electronic tags on a document for signatures, dates, and other fields—a task that previously required human effort and judgment. Seal’s technology will add a new range of AI capabilities, driven by advanced natural language processing, text analytics, and semantic analytics.

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