Brabners advises firms moving into employee ownership trust

With employee ownership increasing in popularity, law firm Brabners has advised on five deals in recent months.

The firm’s specialist employee ownership team has worked with clients including Warrington interior design business Claremont, groundwork contractor Fitfield and logistic consultancy firm Quorum in achieving their transition to employee ownership – each through an employee ownership trust (EOT).

A further two deals for North West firms are undisclosed.

A move to employee-ownership has provided a structured exit route for each firm’s previous owners without sacrificing the integrity and cultural independence of their businesses. The deals have also incentivised employees and company performance in the future with the EOT structure providing the framework for long-term growth.

According to the latest figures from the Employee Ownership Association, there are almost 600 employee-owned businesses in the UK, with growth in the total number accelerating through the course of the pandemic.

Stephen Hadlow, partner and EOT team lead at Brabners, said: “High profile employee ownership deals by the likes of audio equipment retailer Richer Sounds have led to heightened awareness of the EOT model which ultimately safeguards positive and successful cultures within firms.

“As a transaction which allows exiting shareholders to pay no capital gains tax, the pandemic and uncertain tax climate has also furthered interest in EOTs as a succession strategy.

“While employee ownership may not be right for all businesses, it’s highly likely that more will pursue this exit strategy in the coming months as boards and owners become increasingly aware of its benefits and look to shape their firms’ futures with employees at their centre.”