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Private equity fund Permira to take majority share in LegalZoom

Owners of Acromas, the business behind the AA and Saga, to buy $200m of equity in the US online legal solutions provider

8 January 2014

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Owners of Acromas, the business behind the AA and Saga, to buy $200m of equity in the US online legal solutions provider

Private equity fund Permira Advisers is set to take a majority stake in US online legal services provider LegalZoom via a purpose-built company for more than £200m (£121.8m).

The move will see Permira expand further into the legal services sector; it already owns Acromas, the business behind the AA and Saga, which has partnered with Parabis to provide end-to-end services in the personal injury sector.

According to Permira principal Dipan Patel, LegalZoom subscription products have grown 35 per cent every year over the past four years and now make up 30 per cent of LegalZoom's income.

LegalZoom is currently owned by a number of private investors, including Polaris Venture Partners, Institutional Venture Partners, and Kleiner Perkins Caulfield and Byers.

The business shelved plans to float on the New York stock exchange in August 2012, blaming "adverse market conditions".

It has now officially withdrawn its initial public offering (IPO) documents and is to remain privately owned for the time being.

In a joint announcement, LegalZoom and Permira said the new funding would help finance further acquisitions in the legal services sector, both in the US and elsewhere in the world.

Permira, which also owns Ancestry.com and Hugo Boss, made the offer to acquire the LegalZoom equity not currently owned by other shareholders on 30 December 2013.

The transaction is subject to regulatory approval but the parties said they expected to close the deal by the end of March.

Earlier this month LegalZoom unveiled details of its tie-up with QualitySolicitors, initially agreed in September 2012.

Set up in 2008 by former barrister Craig Holt, QualitySolicitors was bought by private equity house Palamon Capital Partners in October 2011 for an estimated £100m.

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