LegalZoom Files for an IPO—Second Attempt to Go Public
In its second attempt to go public, online legal solutions company LegalZoom.com filed the necessary documents for an IPO.
June 11 2021, Published 2:14 p.m. ET
In its second attempt to go public, online legal solutions company LegalZoom.com filed the necessary documents for an IPO.
The Glendale, Calif.-based company announced on June 4 that it filed a registration statement on Form S-1 with the SEC.
The company filed in 2012 but postponed its IPO. It withdrew the offering two years later.
This time, LegalZoom is looking to raise $100 million, which it will use to expand its marketing efforts. No information is available yet on how many shares LegalZoom will make available and the price range of those shares.
LegalZoom will trade on the Nasdaq under the ticker symbol "LZ."
The lead underwriters of the IPO are J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, and Barclays Capital Inc. The other book-runners include BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, and Jefferies LLC.
What is LegalZoom?
LegalZoom is an online platform that offers legal and compliance solutions for individuals and businesses. The company was founded in 2000 by a group of investors that included famed attorney Robert Shapiro. Shapiro was O.J. Simpson’s defense attorney in the infamous 1995 murder case.
The company’s mission is to democratize law, the filing states.
“We believe every business deserves the full protection of the legal system as well as a simple way to start, operate, and run their business daily,” LegalZoom CEO Dan Wernikoff was quoted in the company’s prospectus.
In 2020, 10 percent of all new limited liability companies and five percent of all new corporations were formed through LegalZoom. The site was also responsible for 25,000 trademark applications.
As of December 31, 2020, more than 1 million subscribers were using LegalZoom to help with legal tasks, ongoing compliance and tax advice, trademark filings, copyright filings, and estate planning.
LegalZoom's revenues
The revenues for LegalZoom grew over 15 percent during the COVID-19 pandemic. The company reported $471 million in 2020 revenue compared to about $408 million in 2019. The earnings for the first quarter of 2021 showed an almost 29 percent increase in revenues over the same time last year.
"The COVID-19 pandemic spurred new business formation and also highlighted the impact of policy and enforcement differences across local, regional and state levels," the company’s filing stated.
The company's profits also grew over 33 percent from $7.4 million in 2019 to $9.9 million in 2020.
What happened to LegalZoom’s 2012 IPO?
When LegalZoom filed its IPO in 2012, it was looking to raise about $88 million by selling 8 million shares at a price between $10 and $12. The offering was postponed and eventually withdrawn after private equity firm Permira Holdings Ltd. spent $200 million for controlling stake in the company.
“The Permira funds’ backing strengthens LegalZoom’s ability to move forward with its significant growth plans, which include potential acquisitions in both the U.S. and abroad,” said LegalZoom in a 2014 statement to the Los Angeles Business Journal.
How to buy LegalZoom stock
LegalZoom hasn’t provided information yet on how many shares it’s offering and what the price of those shares will be.
