Fifth Street backs legal services company

The Connecticut-based lender has arranged a $171 million one-stop loan to LegalZoom, an online legal services company majority owned by a Permira portfolio company.  

Fifth Street Asset Management has arranged a $171 million one-stop financing facility to support LegalZoom, the Austin, Texas-based online legal solutions provider to families and small businesses. Greenwich, CT-based Fifth Street has acted as the lead arranger in the transaction, meant to support the company’s stock purchase, dividend payment and growth plans, the firm announced yesterday (18 May).

The financing consists of a first-lien term loan and a revolving credit facility and includes investments from Fifth Street’s two BDCs, the Fifth Street Finance Corp. and the Fifth Street Senior Floating Rate Corp. The terms include the ability to access an additional $75 million to fund future acquisitions.

A company backed by the Permira funds became LegalZoom's largest shareholder in February 2014 through an investment of $200 million. Permira is a London-headquartered private equity firm that advises funds with approximately €25 billion in total committed capital, specializing in five sectors: consumer, financial services, healthcare, industrials and technology. 

The deal is Fifth Street’s fifth financing in support of a Permira funds-owned company. Fifth Street also provided a $110 million one-stop financing facility in connection with the acquisition of software company Metalogix H&S Holdings in December.

Fifth Street Asset Management is a credit asset manager with about $6 billion in assets across two publicly-traded BDCs and other private investment vehicles. The Fifth Street platform has the ability to hold loans up to $250 million and structure and syndicate transactions up to $500 million. The platform provides financing to small- and mid-sized businesses across the capital structure. The firm has additional offices in Chicago, Palo Alto and Dallas.