Law firm makes Stock Market history with £103m flotation
Law firm Knights made history this morning when it floated on the Stock Market.
The Staffordshire firm was valued at £103m on AIM making it the highest valued law firm.
Four of the firm’s shareholders – commercial operations director Mark Beech, facilities director Joanne Beech, Newcastle-under-Lyme office head Karl Bamford and non-executive chairman Balbinder Johal – will split £20m between them as a result of the IPO.
Chief executive David Beech will retain a shares of around 45.5% and will be subject to a three-year lock-in period.
The company will receive £30m part of which will be used to repay the majority of its existing debt and fees.
The placing undertaken in conjunction was significantly oversubscribed, raising gross proceeds of approximately £50m.
David Beech said: “We are delighted to be joining AIM today with a high-quality register of institutional investors that is testament to the strength of our business model.
“We are looking forward to life as a listed company and keeping our new shareholders updated with our ongoing growth plans as we seek to build on the positive momentum we have generated in recent years.”
David Beech said the listing would provide ‘a sufficient war chest to achieve three more acquisitions.’
RSM’s capital markets team advised on the IPO.
In 2012, the firm moved from a traditional partnership model to a corporate structure, which the Directors believe has been a key contributor to the Group’s recent profitable growth.
In the three years to 30 April 2018, the Group has generated compound annual growth in revenue and adjusted operating profit of 31.4 per cent. and 25 per cent respectively.
The admission of Knights marks the 5th law firm to list on AIM and the second so far this year.
This is the second legal IPO that RSM has acted on following the AIM listing of Keystone Law plc in 2017. The team for the Knights transaction was led by Diane Craig, with support from Matt Cowie, John More as well as the Stoke audit team led by Anne Lakin.
Diane Craig, head of RSM’s capital markets team said: “We were delighted to work with Knights on their IPO. Knights has experienced significant growth over the last few years and today’s listing will enable the Group to continue its growth both organically and through investment.
“While listing is not the right course of action for all firms, there has recently been an increasing interest among law firms in the benefits of going public. Given the success of recent legal services IPOs, we anticipate that we’ll see more firms taking this route in the near future.”
Knights announced in May that is acquiring Manchester firm Turner Parkinson for an undisclosed sum.
The acquisition added 45 additional fee earners and a seventh UK office.
Gateley was the first UK firm to float raising £30m at a £100m valuation.
Knights listing is likely to be eclipsed later this year by Manchester law firm DWF.
DWF was launched in Manchester just over a decade ago and will be valued at £1bn.
The float will rake in a fortune for the 275 partners who work for DWF.
If given the go-ahead by the firm’s partners the flotation could see a small number of DWF’s senior manager handed £10 million in shares.
