Workers get a stake in knitwear company

FAMILY-owned Stockport company Rowlinson Knitwear has set up an Employee Ownership Trust (EOT) that has acquired a controlling interest in the company ensuring that workers have a real say in how the business is run in a deal worth £2.3m.

An EOT, introduced by the Chancellor last year, provides a tax neutral process for transferring a controlling interest in a Company to employees.

In a structured deal, the Rowlinson management team, led by managing director Donald Moore, was able to negotiate terms without the funding pressures in typical MBO deals, ensuring that the company can now never be sold.

Rowlinson is thought to be one of the first EOTs in the North West.

Its legal adviser, North West-based SAS Daniels, advised the company on the benefits of the EOT and managed the legal process to bring about the transfer of ownership of the company to the employee trust.

Accountancy firm, Clarke Nicklin provided the company with tax and financial advice and HSBC provided loan facilities to fund the transaction.

Chris Rowlinson, production director, said: “It seemed to us that the interests of everyone were best served by our family taking this action.

“In doing so we could secure the longevity and security of the business, which is our first concern. It just seemed the right thing to do in a business so strongly driven by ethics and our desire to support our employees.”

 Jeremy Orrell, finance partner and head of the corporate team at SAS Daniels, added: “We are delighted that we have been able to help the company in its transition to employee control. 

“The structure brings so many benefits to privately owned companies, like Rowlinsons, who want to protect their heritage.”