- The shareholders at Readie are selling all shares to an Employee Ownership Trust (EOT)
- Shareholders selling their business to an EOT are exempt from capital gains tax
Business will be operated for the benefit of all employees
- The basic premise of an EOT is that it operates the business successfully, for the benefit of all employees
- Being owned by an EOT will enable tax free bonuses of up to £3,600 to be paid to all eligible employees
- Eligible employee criteria is simply completion of one year’s employment
Transaction completed without external debt/finance
- The selling shareholders have agreed to defer payments for their shares to enable the shares to be purchased from future profits of the business
- Management buy outs are normally externally financed with funding from banks, venture capitalists or private equity. Usually involving the management giving up some degree of control with new board members representing third party investors. There would also be significant interest and loan repayments for the business to service
- In this case the transfer of ownership will be funded from future company earnings enabling the business to be sold without any external debt or finance
Existing management team continues
Strategic direction of business is unaltered
- One of the strengths of the management team at Readie has always been the ability to take the long-term view for the benefit of the business, this will naturally fit with the new ownership structure
- The high-level strategy for some time has been continuing, sustainable growth to create career opportunities for our valued staff, this approach will continue
- Our clients, clients consultants and our supply chain partners will continue to see the same consistent, positive, pro-active approach to our projects
What is an EOT
- Introduced in 2014, an EOT is a from of Employee Benefit Trust which holds shareholding in the company on trust for the benefit of all employees. An EOT provides indirect (trust) employee ownership of the company
- Employee owned businesses achieve higher productivity and greater levels of innovation and are more resilient to economic turbulence. They also have more engaged, more fulfilled and less stressed workforces. There are also employee retention and recruitment benefits
Further Information
- Readie is the largest employee owned construction business in the UK
- Readie is the 11th largest employee owned business in the UK
- Financial and Tax Advice was provided by FRP Advisory
- Legal advice was provided by Birketts
Quote from Stuart Read, Chairman at Readie:
Many of our staff have been with Readie throughout our rapid growth, the transition to employee ownership was the logical next step in the development of the company. The creation of an EOT enables us to preserve the legacy of the Readie brand and will help cement our status as a leading contractor in the Industrial & Logistics sector.
This change safeguards the future of Readie for the benefit of its future leaders and employees, the transition to EOT status acknowledges their contribution to the company’s success and gives all employees an opportunity to share in its continuing success. By creating an ownership culture we can more effectively incentivise the employees and continue to deliver sustainable growth.
Quote from Paul Stephens, Managing Director at Readie:
The business has continually shown that it is truly committed to stability & growth. Key to our staff and our clients is maintaining continuity of the management team. To have the best team around me in the Industrial & Logistics sector and move into employee ownership is truly exciting. This change will provide career development and progression opportunities for all of our employees, this has been key to our success so far.
Quote from Jon Dodge, Corporate Finance Partner at FRP Advisory:
This transaction is an important milestone in the exciting story of Readie and we look forward to watching the continued growth and success of the business under its new ownership model. The growth in employee ownership as a sustainable business model has accelerated in recent months and is playing an important role in supporting already successful firms, preserving their cultures while providing viable and structured exit routes for those who have spent years building them.
Quote from Lisa Hayward, Head of Employee Incentives at Birketts:
For companies like Readie who want to safeguard the legacy created by its workforce, employee ownership offers a unique chance to reward those who helped build the organisation from the ground up. We have no doubts that moving to an employee ownership trust will boost job satisfaction and employee wellbeing amongst the Readie workforce – no small feat in the wake of an uncertain year for business.
