Gateley has revealed the details of its planned initial public offering (IPO) including its board and lock-in provisions as it publishes an intention to carry out an IPO on the London Stock Exchange this morning (12 May) and applies for admission of its ordinary shares to trade on AIM.
According to the firm, moving from an LLP to a PLC will allow for faster expansion and diversification giving it a ‘first mover advantage’ and ‘greater opportunities to grow Gateley both organically and by selective acquisition – including lateral hires of individuals or teams, or of other legal firms which offer geographical expansion or specialist services’. The firm will also use its alternative business structure (ABS) to look at acquiring complementary business services, such as professional training and regulatory advice, which it thinks will provide an opportunity for cross selling to existing clients as well as broadening its appeal.
Other areas of growth identified in the announcement include developing Gateley’s relationships with house builders, gaining more instructions from the Pension Protection Fund, growing corporate teams in Yorkshire and the North West, improving its project litigation offering and building its representation on bank panels.
The move will also allow the firm to create a more flexible career structure, and align its shares with employees’ goals in a bid to maintain staff retention. The firm’s current partners who are selling shares will all move to become salaried employees but will retain 50.1% of the firm’s share capital in aggregate. They have also all undertaken a not dispose of any shares for the first year. More senior partners are facing a five-year lock in with claw-back provisions for cash received and retained shares.
The announcement also outlined the board which will comprise:
- Non-executive chairman Nigel Payne: former chief executive of Sportingbet and non-executive director of Gama Aviation
- Chief executive Michael Ward: joined the firm in 1987 and was elected senior partner in 2001
- Chief operating officer Peter Davies: dispute resolution lawyer who has been involved in the firm’s management for 20 years
- Finance director and company secretary Neil Smith: joined in 2008 from Grant Thornton
- Non-executive director Joanne Lake: spent 21 years in investment banking including with Panmure Gordon and Williams de Broe
- Non-executive director Michael Seabrook: spent nearly 25 years as a partner at Eversheds and since retiring has held a range of non-executive roles
Michael Ward, chief executive at Gateley said: ‘Gateley is a successful, fast growing and entrepreneurial legal services group which operates in a rapidly changing marketplace. We believe the catalysts for value creation are now to acquire, incentivise, differentiate and where sensible diversify. These opportunities for growth will undoubtedly be most accessible as a PLC and we want to be the first to be able to take advantage of them.’
Nigel Payne, non-executive chairman of Gateley added: ‘I have been very impressed with the ambition and vision of the senior Gateley team. The dynamic growth prospects, strong cash generation, and desire to look after its upcoming talent make the business a compelling investment proposition. I am very excited about the future.’
For the year ending 30 April 2014, Gateley reported revenues of £54.6m, up from £51.4m in 2013, and adjusted profit before tax of £7.4m, also up from £5.1m the previous year. More recently, the firm posted revenues of £26.7m for the first half of 2014, up from £23.1m during the same period in 2013, while adjusted profit before tax was £2.6m compared to £1m in the first half of 2013.