The business could be worth £700m when it floats on London’s Main Market
Thursday 07 Feb 2019 Author: Ian Conway

Legal services firm DWF has confirmed plans to join the London stock market in what could be the largest legal services flotation. The firm first announced last June that it was interested in an IPO (initial public offering).

Media reports speculate DWF will be valued at around £700m or 15 times 2018 profits but some observers expect it to push for a higher rating.

While its quoted rivals can be found on AIM, DWF is planning to list on London’s Main Market and could qualify for the FTSE 250 index in time.

Turnover in the 12 months to 30 April 2018 was £236.5m, an increase of 18.6%, driven equally by acquisitions and organic growth.

By comparison Gateley (GTLY:AIM) reported turnover of £86m in its 2018 financial year while Gordon Dadds (GOR:AIM) reported £31m and Keystone Law (KEYS:AIM) is forecast by analysts to show c£40m revenue when it reports full year earnings in May.

DWF has a global presence with 27 offices in 14 jurisdictions employing over 3,000 staff. Its blue-chip client list includes 23 FTSE 100 companies and over half of its clients have been with the firm for 10 years or more.

The business is split between commercial services, which includes litigation, insurance, international, and connected services with a focus on technology.

DWF estimates that the annual global legal services market reached over £650bn in 2017 and could grow to as much as £775bn by the end of 2021.

It sees this growth being driven by increased corporate activity at home and abroad, continued regulatory change and more outsourcing of in-house legal services to third party firms.

DWF is looking to grow and its stock market flotation document specifically refers to the ‘large consolidation opportunity’ in the legal market. It certainly has form as a consolidator having acquired 14 rival firms in the last 12 years.

Both the connected services and international divisions are singled out as areas where DWF is looking to grow through acquisitions.

As of last October the firm had fewer than 75 partners outside the UK and in the US it relies on a single office in Chicago and an association with a US law firm.

Interestingly, Nigel Knowles, the man who led DLA Piper’s stellar rise to prominence, was appointed chairman in September 2017 which speaks volumes about the firm’s ambitions.

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