LegalZoom – the online US legal services business that recently launched in the UK – has strengthened its financial position by selling a large chunk of the business to leading European private equity company Permira.
Permira is expected to acquire more than $200m (£122m) of the outstanding equity of LegalZoom, which claims to be the most recognised legal brand in America and has now shelved plans for a stock market listing.
In a statement the pair said “the Permira funds’ backing strengthens LegalZoom’s ability to move forward with its significant growth plans, which include potential acquisitions in both the US and abroad”.
Legal Futures revealed last month that LegalZoom had soft-launched in the UK , a project it is working on with QualitySolicitors.
Permira already owns Acromas, the holding company for the AA and Saga – which last year both received alternative business structure licences – and last year bought top genealogy website ancestry.com.
Dipan Patel, a principal at Permira, said: “LegalZoom is a clear leader in the huge untapped market for small business and family law. The company has strong brand recognition, a unique value proposition and a proven track record.
“We’ve been impressed by the team’s development of multiple successful subscription products, which, in less than four years, now represents more than 30% of revenue, growing in excess of 35% per year.”
LegalZoom CEO John Suh added: “The Permira funds are a fantastic partner for this next chapter of LegalZoom’s growth. They share our passion for creating modern, customer-centric legal solutions that help businesses and families save both time and money. They also have an unusual knack for helping industry leaders extend their market leadership.”
The deal will see Permira become LegalZoom’s largest shareholder, with the right to appoint a majority of the board. The management team will maintain some ownership in the company, as will the company’s current largest shareholders, including Polaris Venture Partners, Institutional Venture Partners, and Kleiner Perkins Caufield & Byers.