LegalZoom Buying Formation Nation To Expand Portfolio Of Small Business Solutions

By Amit Chowdhry • Feb 20, 2025

LegalZoom – a leading online platform for legal services – announced it acquired small business services company Formation Nation. Formation Nation offers services ranging from white-glove business formation and compliance offerings under its Nevada Corporate Headquarters (NCH) business to low-cost business formations under its flagship Inc Authority brand.

LegalZoom’s technology-driven legal and compliance solutions, along with Formation Nation’s deep roots in customer support, will enable the combined company to deliver extraordinary service across its complementary portfolio of small business products and partnerships.

This deal accelerates LegalZoom’s strategy of attracting higher-value customers by utilizing Formation Nation’s best-in-class customer service teams. Formation Nation will further differentiate the LegalZoom brand as a premium business formation advisor by expanding LegalZoom’s consultative service and support capabilities and enhancing the customer education experience. With this deal, LegalZoom will benefit from the immediate onboarding of over 140 seasoned small business service experts.

The Formation Nation acquisition also supports LegalZoom’s customer segmentation strategy. LegalZoom will utilize Formation Nation’s Inc Authority brand, which provides business formation offerings at a lower price point, to service customers seeking do-it-yourself solutions. This will ensure the appropriate level of service across its customer base and reserve the LegalZoom brand for more premium offerings.

The Formation Nation deal closed on February 10, 2025, inclusive of synergies. It is expected to positively contribute to Adjusted EBITDA and be accretive to adjusted earnings per share in the first year of the acquisition. Under the terms of the deal, LegalZoom acquired Formation Nation for $49.3 million in cash upfront and approximately 2.2 million restricted shares of the Company’s common stock, subject to lockup and voting agreements. An additional $15.4 million in cash is subject to a one-year holdback and customary adjustments.

KEY QUOTES:

“With industry leading TrustPilot scores of 4.9 (Inc Authority) and 5.0 (NCH) out of 5.0, the addition of Formation Nation will further distinguish LegalZoom as an industry leader focused on quality. Under the thirty plus year leadership of Formation Nation CEO Cort Christie, Inc Authority President Trevor Rowley and NCH President Raymond Marin, the company has built a strong culture of excellence centered around customer service. We are thrilled to partner with the entire team and unite our cultures of service and technology to create an even stronger LegalZoom.”

– Jeff Stibel, Chairman and CEO of LegalZoom

“We look forward to extending our high-touch service model and complementary portfolio of products to LegalZoom customers. At the same time, this transaction will enable Formation Nation’s service model to benefit from LegalZoom’s robust technology platform and provide deeper value to our customers through LegalZoom’s complementary ecosystem of legal and business services. We are honored to join forces with an industry leader to power more small businesses across the U.S.”

– Cort Christie, Chief Executive Officer and Founder of Formation Nation