Gateley news, updates and analysis | Page 3 of 4

Gateley’s partners are set to receive £25m, more than 80% of the £30m total raised, as the West Midlands firm started its first day of dealings on the Alternative Investment Market (AIM).

The firm set aside £5m from its initial public offering which placed some 31.6m ordinary shares with institutional and other investors at the placing price of 95 pence per share, and had a market capitalisation of £100m on admission – down from the initially targeted valuation of between £130m to £140m. When its shares began trading at 8am this morning there was an initial 20% bump to 115p but as of 10am the price had fallen back to around 100p.

Net proceeds from the £5m which is designated for the firm will be used ‘to support the transition from the previous LLP structure and for general working capital to support and implement Gateley’s growth strategy’.

According to Gateley, the admission received strong support from staff, partners and Gateley clients, with approximately 10% of gross placing proceeds being investments in the company by clients.

Cantor Fitzgerald Europe was the financial adviser, nominated adviser and broker to Gateley and KPMG was the accountant and tax adviser.

Chief executive Michael Ward said: ‘We are delighted to be the first UK law firm to list on AIM and today marks a significant achievement for this successful, fast growing and entrepreneurial legal services group. We view the support from staff, partners, clients and investors as a strong endorsement of the group’s growth plans and we look forward to creating value for our new shareholders as we begin life as a listed public company.’

The firm’s board comprises:

• 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

The move sees the 380 fee-earner outfit become the first UK-listed law firm to be publicly traded.

jaishree.kalia@legalease.co.uk

For more on Gateley’s listing see: Selling the family silver: Will Gateley’s listing on London’s stock exchange pay off?

Documents filed at the London Stock Exchange today (29 May) reveal West Midlands firm Gateley is aiming for a £100m valuation and has investors lined up as it plans to be the first UK law firm to carry out an initial public offering (IPO).

The 380-fee earner firm is looking to raise £30m at the admission with 70% of the firm held privately. The update also revealed that Gateley has already lined up two significant investors to take stakes with Schroder Investment Management taking 8% while Milton Asset Management is looking to acquire 5.6%.

The release also shows the holdings and value of the seven current significant shareholders post admission. Senior partner Michael Ward, disputes partner Peter Davies, corporate partners Brendan McGeever and Paul Hayward, will all hold 3.12% of the firm – worth £3.12m – while regeneration and development partner Callum Nuttall will have holdings worth £2.75m, and corporate recovery head Mark Wilson and banking & finance chief Andrew Madden will have a £2.4m stake each.

The listing will see Gateley admit 105.3m ordinary shares with an issue price of 95p each and follows yesterday’s announcement of a targeted admission date of 8 June onto AIM.

In its initial filling on 12 May, Gateley said that moving from an LLP to a PLC would allow for faster expansion and diversification and give it a ‘first mover advantage’. It plans on using its alternative business structure to acquire complementary business services, such as professional training and regulatory advice, providing it with an opportunity for cross selling to existing clients as well as broadening its appeal.

Other areas of growth identified were 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 firm also plans to use the IPO to create a more flexible career structure, aligning its shares with employee goals in a bid to maintain staff retention. The firm’s current partners, who are selling the 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 not to dispose of any shares for the first year while more senior partners are facing a five-year lock in with claw-back provisions for cash received and retained shares.

sarah.downey@legalease.co.uk

Gateley has set 8 June as its expected admission date onto the AIM listing, giving it little over a week left to garner interest in what will be the first UK law firm to carry out an initial public offering (IPO).

With an issue price of 95p, the firm is in the process of drumming up interest from potential shareholders though it did not confirm the number of shares it is looking to sell. In recent days, Gateley chief executive Michael Ward, has been undertaking a roadshow of institutional investors and fielding questions over the firm’s listing.

In its initial filling on 12 May, Gateley said that moving from an LLP to a PLC would allow for faster expansion and diversification and give it a ‘first mover advantage’. It plans on using its alternative business structure (ABS) to acquire complementary business services, such as professional training and regulatory advice, providing it with an opportunity for cross selling to existing clients as well as broadening its appeal.

Other areas of growth identified were 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 firm also plans to use the IPO to create a more flexible career structure, aligning its shares with employee goals in a bid to maintain staff retention. The firm’s current partners, who are selling the 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 not to dispose of any shares for the first year while more senior partners are facing a five-year lock in with claw-back provisions for cash received and retained shares.

michael.west@legalease.co.uk

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.

jaishree.kalia@legalease.co.uk