Sills & Betteridge complete firm’s transition to employee ownership

A leading Lincoln industrial engineering company has secured its legacy by placing its future in the hands of its employees.

On the advice of Corporate Partner Euan McLaughlin, long-standing Sills & Betteridge clients Castlet Holdings Ltd has been sold to an Employee Ownership Trust (EOT).

The company lists Siemens, Tata Steel and BAE Systems among their customers and is among an increasing number of businesses being run by EOTs.

Having provided remedial advice on various shareholder issues in the past, Euan proposed to the Board that an EOT was the key to the long-term stability and success of the business - which was already owned by a group of its employees.

Euan collaborated with other professionals, including business consultants Mobius Group and regional accountancy practice Wright Vigar to flesh out the terms of the deal and undertake shareholder engagement.

Managing Director Tim Eagles commented 

"Euan provided innovative, astute legal advice with a human touch, offering comprehensive support to myself and the Board at every stage of the transaction. It made a huge difference having a solicitor who had taken the time to understand the individuals and dynamics within the business, rather than just treating this as a job to complete".

Having advised on a number of EOTs to a range of different businesses, and featured in the Sunday Times in relation to EOTs, Euan is a strong supporter of the EOT model (in the right circumstances)”

"EOTs are a relatively new phenomena which are fast gaining traction as their benefits become more widely understood – tax advantages, succession planning and social responsibility among the key motivators. 

“They are most suited to business owners who value the future of their company and the people who helped to build it, over an immediate cash sale – and can be an excellent option where a trade sale is either unavailable or unattractive to business owners".

The principle, as the name suggests, is that the company is owned by its employees via a trust. The trust would then owe a debt to the sellers of the purchase price, and this would typically be paid using available cash in the company and ongoing profits passed up from the company to the trust.

For more information about the advantages of EOTs and qualifying criteria, please visit Employee Ownership Trusts | Sills & Betteridge LLP or call Euan McLaughlin on 01522 700490.

Pictured are employees (from left) Tom Austen, Tony Donnor, Euan McLaughlin, Tim Eagles, Andrea Plumpton and Brian Long-Melton.