Legal Business

Knights shareholders to get £20m windfall after float valued at over £100m

Staffordshire-based Knights is set to raise £50m from its initial public offering (IPO) on AIM this week (29 June), with the firm’s four selling shareholders to split £20m in proceeds.

The float – which would be the largest legal IPO to date – is also expected to give Knights a market capitalisation of £103.5m, in line with the firm’s forecast from earlier in the month.

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 (pictured) will retain a shareholding of around 45.5% and will be subject to a three-year lock-in period in which he will be unable to sell his shares. The other shareholders will hold 1.7% each.

In the firm’s admission document, it said that the net proceeds from the float would be used to ‘repay the majority of the group’s existing debt facilities and for general working capital and corporate purposes.’

Earlier this month, David Beech told Legal Business that a listing would provide ‘a sufficient war chest to achieve three more acquisitions.’ 

Knights had already been in buyout mode, announcing an agreement in May to buy Manchester firm Turner Parkinson for an undisclosed sum. The acquisition added 45 additional fee earners and a seventh UK office.

Knights’ AIM listing follows Rosenblatt this year, and Gordon Dadds and Keystone Law in the second half of last year. Gateley was the first UK firm to take the step back in 2015, raising £30m at a £100m valuation.

However, Knight’s record for the largest UK law firm listing may not stand for long. Top 25 LB100 firm DWF confirmed this month it is also considering a potential float. Standard valuation models would value a listing at between £400m and £600m.

Fieldfisher also confirmed recently it had engaged in ‘pilot fishing’, a process of pitching the idea of a float to potential investors, but an IPO anytime soon seems unlikely.

tom.baker@legalease.co.uk