How much is a 400-person law firm worth as a business?

We now have the answer to this question as a result of publicly listed law firm DWF acquiring 400-person law firm Rousaud Costas Duran ("RCD"). The partners of RCD will be selling their equity at close to 1.4 times their annual revenue. This will be made up of upfront cash, DWF shares and a cash earnout. 1.4 times is subject to them receiving the full earnout component. Upfront cash is the equivalent of 21% of partners' annual revenue and DWF shares is the equivalent of 77% of their revenue. The earnout represents the remaining 42%. The deal has a large weighting towards the current and future value of DWF shares and the dividends they generate. DWF is listed on the London Stock Exchange. RC

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