The government introduced employee ownership trusts in 2014, with more than half of them launched since 2018. A number of business valuation firms, including the Big Four, RSM, and RM2 Partnership, have strong established specialisations in employee ownership trust plans, and various groups, including the White Rose Centre for Employee Ownership and the Employee Ownership Association, provide extensive research on developments. Even Aardman Animations, the creators of Wallace & Gromit, switched to this new model (in 2018).
The sharp increase in appetite has continued into 2021. A sample of new trusts include:
- Swindon-based F1 supplier Retrac Group’s EOT took full equity of the Swindon-based company from chairman Andy Carter (ICON Corporate Finance and Shawbrook Bank advised and financed the transition);
- Purcell Architects, with studios in the UK, Hong Kong, and Australian, launched their EOT at the beginning of this month; and
- West Yorkshire rental company Horizon Platforms has announced that ownership of the company will transition from founders and majority owners Ben Hirst and Ruairi Duggan. RSM advised Horizon on structure, tax, and valuation issues.
Just last month, PwC joined the Employee Ownership Association, “after seeing the continued growth of businesses becoming employee owned via an employee ownership trust (EOT) … despite the pandemic.” PwC has already been involved in a number of EOT transactions including advising on tax, valuations, structuring, modelling, legal, debt advisory, employee communications, and governance. Dan Harris leads the PwC EOT team.
The largest EOT in the UK, which includes over 83,000 employee owners, is the retailer John Lewis Partnership. According to RM2 Partnership, Matt MacDonald Group (engineering), Arup Group (design and engineering), Greenwich Leisure (facility management), and Unipart Group (logistics) comprise the top five EOTs. Greenwich’s plan is new in 2021.
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