New Law pioneer Axiom has ditched long-trailed plans for an initial public offering (IPO) after securing a ‘significant investment’ from private equity house Permira.
The undisclosed investment makes Permira the company’s majority owner and calls time on Axiom’s much-hyped public offering, which many considered a bellwether for the fast-growing alternative legal services market.
‘One option was to do an IPO, but we took an alternative path towards the same objective,’ Axiom’s senior vice president David Pierce told Legal Business. ‘Permira is the path we’ve taken, and there are lots of advantages to private ownership.’
In preparation for its IPO, Axiom had spun off two of its companies in Knowable and Axiom Managed Solutions in February.
According to Pierce, ownership of all three companies caused difficulties: ‘They needed different things and different levels of investment. Sometimes we had to make compromises. We made the best compromises, but still compromises.’
Axiom also cited Permira’s track record in investing in professional services businesses. The sponsor acquired online legal service provider LegalZoom in 2014 for $200m.
Despite the shift in tactics, Axiom chief executive Elena Donio and the rest of Axiom’s management team will stay in place and lead the company. Though Pierce would not comment on the size of the backing, Permira has considerable firepower as one of Europe’s leading private equity houses. Permira had also previously invested in the sector funding Knights through its debt management and advisory arm in 2016. The new funds are likely to be invested in Axiom’s technology platform, its sales offering and future global expansion.
Founded in 2000, Axiom is generally regarded as the highest-profile New Law brand in the global market. The firm, best known for providing freelance lawyers for short engagements, reported revenue of $360m in the 2017/18 financial year and has more than 2,000 employees on three continents.
Turning to private sponsors sees Axiom follow several of its peers, including rival Lawyers On Demand, which secured private equity backers last year after Bowmark Capital acquired Bryan Cave Leighton Paisner’s entire 62% stake in the business.
While the abandonment of its long-held ambitions to go public will come as a surprise, Pierce insists there was no significant obstacle which prevented the move: ‘Going to market is an intense process but this is what we’ve chosen. It’s the identity of the investor which makes it work.’
For more analysis on Axiom’s sale prospects, click here.