Manchester law firm announces £400m flotation on Stock Market

Manchester law firm DWF has announced it is to float on the stock market in a deal that could value the firm at £400m.

The flotation would dwarf anything that has come before it and will earn the partners in the firm a share of the money raised. The final value of the firm could be as high as £600m.

The move comes just eight months after law firm Knights set a new record. The firm was valued at £103.5m and the flotation netted a £20m fortune for its founders and management team.

Under the terms of the flotation DWF’s partners will have to take a 40% cut in salaries.

But the dividend they receive from shares is expected to leave their total compensation not ‘a million miles apart’ from current pay levels.

The firm’s 68 equity and 241 non-equity partners are participating in the float, although each will continue to be self-employed members.

Each partner will be on a fixed annual share and receive dividend income and participate in an annual partner bonus pool.

DWF chief executive Andrew Leaitherland said: “If you’re an equity partner, you’re going to be on a fixed profit share which is 40% of what you used to earn and then in addition to that you’ll get dividends based on the capital you’ve got allocated to you.”

The flotation is sixth by a UK law firm and the largest to date.

DWF has been working with US investment bank Stifel on the float since October 2017.

DWF last week its revenue for the six months to 31 October 2018 was up 18% to £133.4m, with 14% of that said to be organic growth.

DWF expects to announce the final offer price and to publish its final prospectus, with admission currently expected to occur in March 2019.

The firm said it expects to raise approximately £75m to repay a portion of the members’ capital contribution and to invest in operations and infrastructure including in additional IT systems and strategic initiative change programmes.

There will also be working capital for general corporate purposes as well as potential funding for future acquisitions.

In December, the firm hired former Lucozade Ribena Suntory GC Mollie Stoker to join its executive board. She is acting as counsel to senior management on the firm’s M&A activity.

She will also become company secretary.

Zeus Capital will act as lead manager in the transaction.