Keystone Law has turned to boutique private equity house Root Capital to fund its growth plans, raising £3.15m in return for a 35% stake in its business.
The capital will be used in part to expand the firm’s infrastructure, and partly to acquire an equity interest from founding partner, Charles Stringer, who is retiring as IT and finance director, taking on a non-executive position and acquiring a small share of the business.
Keystone managing partner, Simon Philips, will hold a seat on the board, alongside IT director Maurice Tunney – who joined from Fieldfisher earlier this month and replaces Stringer – as well as managing partner James Knight, and directors Will Robins and Mark Machray. Keystone has also secured a financial director to start at the end of the year.
Keystone managing partner James Knight said: ‘This move signifies one of the most significant strategic developments in Keystone’s 12 year history. We have always experienced strong organic growth and this additional capital injection will help us to realise our more ambitious growth plans. Root’s investment really will enable us to rapidly improve the facilities Keystone provides to its lawyers and the service it delivers to its clients.’
According to Root Capital’s website, the private equity house ‘invests in growth businesses in the equity gap and also relish challenging deals, including public-to-privates, distressed situations and businesses which need major changes to improve their underlying strength and value.’
Managing partner of Root Simon Philips said: ‘We were drawn to Keystone because it stands out from the crowd as a forward thinking law firm with innovative leadership and a clear vision. It is not weighed down by a partnership and it has the infrastructure, people and processes to make huge waves in the legal market. We understand the firm’s unique culture and personality and the driving factors that make it so successful and look forward to nurturing these in the future.’
Keystone successfully converted to an Alternative Business Structure (ABS) in October last year. Turnover in the last year has increased from £12.2m in 2013 to £14.1m in 2014, while Keystone also launched outside of the UK with Keypoint Law in Australia.