HWL Ebsworth IPO aims high

Law firm HWL Ebsworth is targeting an initial public offering size of between $250m and $350m.

Law firm HWL Ebsworth is targeting an initial public offering size of between $250m and $350m as part of its aspirations to become a public company.

The size is understood to be less than originally planned, while the overall market value is yet to be determined.

It comes after analysts at Macquarie Capital last week released research suggesting that the law firm could be worth between $534.9m and $917m, including debt.

This equals a price range of between 7 and 12 times its earnings before interest, tax, depreciation and amortisation.

HWL Ebsworth is a full-service Australian corporate law firm that is a significant player in the local legal services market, providing legal services to corporate and government clients.

It generated about $358m of revenue in the 2020 financial year and expects to earn $76.4m for the 2021 financial year and pay out 75 per cent of earnings to investors at the midpoint of its estimated price range.

The firm, with 274 principal lawyers, is transitioning away from its partnership model and boasts of its competitive prices, which have not increased on an hourly basis since 2016.

The analysts expect earnings to grow by increasing market share, hiring staff and growing professional staff, along with domestic acquisitions, investment in adjacent businesses and opportunities in offshore markets.

The Australian’s Margin Call column revealed IPO plans for HWL Ebsworth in August and the company is set to be one of the significant floats this year.

Perhaps shaping up to be the largest float for 2020, however, is Nuix.

On Friday, Nuix finalised its terms for its float, with the company to raise $975.3m and list with a $1.8bn market value, with shares sold at $5.31 each.

Macquarie Capital and Morgan Stanley are believed to have locked in the float plans for Nuix, with the company now understood to be heading to the boards rather than being sold after major industry players and private equity groups lined up for the business in what was a dual track process.

Nuix will start trading on December 4.

The other company hoping to list this year with a $1.8bn market value is Liberty Financial, as reported by The Australian this week, with much of the demand expected to come from retail investors.

The company appointed Credit Suisse for a float last year, as revealed by this column at the time, following on-again off-again plans for a listing over many years.

Also working on the deal are retail brokers Evans and Partners and Shaw and Partners.