Analysts at Macquarie Capital believe law firm HWL Ebsworth is worth between $534.9m and $917m including debt.
This equates to between 7 and 12 times its earnings before interest, tax, depreciation and amortisation.
The company’s forecast earnings for the 2021 financial year are $76.4m.
The research is being released ahead of plans by the company to list on the Australian Securities Exchange through Macquarie Capital.
The company is expected to pay out 75 per cent of its earnings at the mid point of its range, analysts said.
Macquarie analysts say that HWL Ebsworth is a full-service law firm that is a significant player in the Australian legal services market.
It generated about $358m of revenue in the 2020 financial year and provides legal services to corporate and government clients.
The company has achieved 13.3 per cent annual revenue growth from between the 2011 financial year and the 2020 financial year, which has seen its market share increase to 2 per cent in the 2019 financial year from 1.4 per cent in 2016.
The firm focuses on corporate law and does not compete in personal, criminal law, community legal services or industrial relations.
Its total addressable market in 2019 is $16.2bn, representing 72 per cent of the total legal services market in Australia.
The company has not increased its hourly prices since 2016 and Macquarie analysts describe its prices across its national services offering as competitive.
The float comes as the group transitions away from a partnership model.
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.
HWL Ebsworth achieved total revenue growth of 13 per cent for the 2020 financial year and 9 per cent for the 2021 financial year.
For the 2020 financial year, the law firm generated $358.3m, which is expected to increase to $390.5m this financial year, while its earnings before interest, tax, depreciation and amortisation was $71.2m, expected to increase to $80m for the 2021 financial year.
Net profit for the 2020 financial year was $33.3m, expected to increase to $37m for the 2021 financial year.
The firm is expected to have 274 principal lawyers for the 2021 financial year.
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