Employee Ownership Trust Transactions
An Employee Ownership Trust (EOT) is a government backed initiative, created by legislation, that allows a business owner to sell a controlling stake in a company to a trust held for the benefit of all employees, providing significant tax advantages, in that the vendors capital gains tax is significantly less, by as much as 50%.
Instead of employees holding shares directly, the EOT holds a majority interest and acts on their behalf to ensure the company is run for their long-term benefit.
This structure can lead to tax relief for the sellers and allows employees to receive tax-free bonuses up to a certain limit.
We have extensive experience in EOTs, we are committed to being your trusted advisors throughout the entire process, providing tailored guidance, addressing specific challenges, and ensuring compliance with all relevant regulations.
With our in-depth knowledge, we will help you make informed decisions and navigate the complexities of this unique business structure.
Employee Ownership Trust Transactions – Our Service
Our approach to EOT transactions is based on our real-life experiences of advising on, structuring, delivering funding and project managing such transactions through to completion.
Banks and other debt providers will provide loans to EOT transactions in the same way as they would in a Management Buy-Out or Buy-In Transaction, which can allow the vendors to extract a significant amount of cash on completion, with the balance of any value being deferred consideration.
The major advantage to a vendor is that a sale to an EOT involves a light touch legal process free of the due diligence and warranty/indemnity process typical in any other sale transaction.
However, it must be noted that Capital Gains Tax on the vendor is significantly less, by up to 50%, than any other kind of disposal.
Our Service in EOT transactions typically involves.
- A walk through of all aspects of an EOT, the rules and regulations.
- Independent Valuation Advice – a requirement of the legislation.
- Advice on transaction structure and funding.
- Debt advisory and delivery of day one funding to provide a cash lump sum to the vendors.
- Project management of the funding and funder due diligence process, including negotiation of terms and conditions and funding documents.
- Project management of the legal and tax clearance process with the relevant tax and legal advisers.
- Prepare presentations and assist in communication with senior leadership and employees, about the EOT.
- Provide advice on how to structure the company and EOT boards to comply with the legislation, while reaming appropriate for the size, nature and requirement of the business.
Arrange a meeting with us for free.
Any company owners wishing to learn more about the sale of a company to an Employee Ownership Trust should contact us now, to arrange to meet with us for a free, no obligation presentation on EOT’s and how they work.
To make an enquiry about EOTs, please contact one of our Directors using the details below.
Employee Ownership Trust Transactions Case Studies
Castle Square Corporate Finance Service Just Motors!
Northern based car dealership, The Just Partnership Limited (Just Motor Group), has been partially sold by its Shareholders to an Employee Ownership Trust (EOT) in a transaction advised on by Castle Square Corporate Finance and Taylor Emmet. With an annual turnover approaching £60 million in its last reported annual accounts after a period of impressive growth, Just Motor Group is a leading retail car dealership group in the North West and Yorkshire region, for some of the most recognisable manufacturers in the UK. The business operates from five sites, retailing new and used vehicles from globally recognised manufacturers such as Citroen, Peugeot, MG, Hyundai and represents high growth manufacturer Leapmotor. Now employing around 100 staff, Just Motor Group has expanded significantly since its incorporation in 2012, where it started as a single site business. The rewards of future growth will now be enjoyed by the employees, through the Employee Ownership Trust scheme, with an element of shareholding retained by two of the management team to incentivise future growth. The EOT scheme has allowed Max Croft, Russell Allison and Kevin Tyrrell, shareholders, to realise the value in their business, whilst retaining the strong brand, ethos and culture of success engrained in the Just Motor Group. Josh Stokes from the Castle Square Corporate Finance team provided advice on transaction value, structuring and manufacturer approval, supported by Managing Director Kevan Shaw. Castle Square, a mid-market specialist corporate finance boutique, based in Sheffield and Leeds, has a proven track record in corporate acquisitions, disposals, management buy-ins and buy-outs, and corporate fundraisings. Josh Stokes said, “We are delighted to have worked towards a successful exit strategy for Max, and partial exit for Russell and Kevin. It is excellent to see that the culture of Just Motor Group will be retained, with a clear focus on
External Insulation Company Transfers Ownership to Employees
With three decades of experience behind him in the heating industry, entrepreneur Dave Smith realised there must be smarter and simpler solutions to external insulation than were available at the time.
Primary Pro and Condensate Pro were created to provide a total solution to challenges faced when insulating external heat pumps and condensate pipework.
Majority Sale of Leading FMCG Supplier to Employee Ownership Trust Marks New Chapter
International FMCG supplier, Purston Park Limited, has been sold by its Shareholders to an Employee Ownership Trust (EOT) in a Transaction advised on by Castle Square Corporate Finance and Blacks LLP, with funding from HSBC.
Cars2 shifts gears into Employee Ownership
West Yorkshire based car dealership, Cars 2 Limited, has been sold by its Shareholders to an Employee Ownership Trust (EOT) in a Transaction advised on by Castle Square Corporate Finance and Freeths, with funding from Barclays.
Leading metals and minerals supplier sold in change of ownership deal
Leading South Yorkshire based company, Westbrook Holdings, which trades as Westbrook Resources from its head office in Dronfield, has been sold by its Shareholders to an Employee Ownership Trust in a transaction advised on by Sheffield based dealmaking firm, Castle Square Corporate Finance, and the Sheffield office of national law firm, Freeths. HSBC provided funding for the transaction.
Specialist VW Campervan conversion company moves into partial Employee Ownership
Denby Campervans Limited, one of the UK’s leading providers of bespoke, high-spec, made-to-order luxury campervans, specialising in the iconic VW campervan brand, has changed ownership via a sale of equity to an Employee Ownership Trust, in a transaction advised by Yorkshire-based specialist Corporate Finance firm, Castle Square Corporate Finance.