For listed law firms, recent months have been a period of brutally mixed fortunes. While Slater and Gordon has suffered a string of high-profile reverses, select partners at fellow pioneer Gateley have taken home almost £500,000 after a stake in the top 50 UK law firm was sold for nearly £10m.
Documents at the London Stock Exchange (LSE) show a sale of 6.21% of the firm’s equity, or 6,641,333 aggregate ordinary shares.
Key beneficiaries are chief executive Michael Ward, chief operating officer Peter Davies, corporate restructuring partner Brendan McGeever and corporate partner Paul Hayward. The four sold 328,900 shares at a price of £1.50 – taking home a total of £493,350 each.
Meanwhile, real estate partner Rod Waldie received £296,010 for 197,340 shares; residential development partner Callum Nuttall received £434,860 for 289,907 shares and corporate partner Nick Smith took home £210,960 for 140,640 shares.
In addition finance director Neil Smith purchased 20,000 shares for £30,000 and non-executive director Suki Thompson purchased 10,000 shares for £15,000. Both Ward and Davies still own almost 2.5% of Gateley’s total issued share capital and over 2,500,000 of ordinary shares
According to the filing, on Gateley’s 2015 admission to the Alternative Investment Market (AIM), partners of the firm held 70% of the enlarged capital at that time. The Gateley partners voluntarily entered into five year lock-in agreements with Gateley which permitted them to dispose of up to 10% of their interest in any 12-month period after the first anniversary of admission.
New and existing institutional investors purchased 6,333,334 shares while 307,999 were purchased by Gateley employees in what the filing said was a result of ‘strong demand’. The freely floated portion of Gateley’s shares that can be publicly traded has now increased from 34.3% to 40.3% as a result of the sale.
In July this year, Gateley posted another strong round of financial results, with a double digit increase in revenue of 16% to £77.6m. In addition, adjusted EBITBA increased 16% from £12.9m to £14.9m, while profit before tax rose 19% from £11m to £13.1m. Net assets grew from £12.7m to £17.4m.
The share sales appears to demonstrate continued momentum for Gateley, whose 2015 float made it the first major law firm to list on the LSE. The closely-watched deal generated £30m in proceeds, with £5m retained by the firm for investment and the remaining £25m distributed to partners.
The prospect for listed law firms has been hotly anticipated for years but, with fellow pioneer Slater and Gordon currently struggling, the profession remains highly sceptical of the benefits of outside investment.