IP firm lists on ASX

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A consortium of IP law firms Davies Collison Cave and Freehills Patent Attorneys, a spin-off of Herbert Smith Freehills listed on the ASX on Wednesday.

On its first day of trade, stocks rose as much as 13.5% in afternoon deals, The Australian reported.
The IPO is an exciting milestone and will provide both DCC and FPA with increased financial flexibility to pursue selective and complementary acquisitions and to retain and attract high-quality people,” chief executive Leon Allen said.

The company floated under the banner of Qantm Intellectual Property, with a market cap of $331m, at $2.22, representing 16.5 times earnings per share, according to a report by the Australian Financial Review.

Allen distanced the company from listed law firm Slater & Gordon this week, calling Qantum a predictable business rather than an event driven one.

“We are not a law firm. We're very much a pipeline business and we're a predictable business,” Allen said.

“In contrast, legal practices are event driven – something has to happen before you need a lawyer.”
He told the AFR that intellectual property practices have a steady flow of work.

“We're a great cash conversion business, with small invoices going out all the time. Even when we run litigation matters, we issue monthly invoices and I don't leave the office unless all the matters are charged out each month,” he said.

The prospectus says Qantm will poach and keep lawyers by giving them equity stakes.  Allen said the company will look for acquisition opportunities in Australia, but said he has ruled out acquiring firms in other practice areas.

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