EOT Case Study – Hi-Tech Automation Limited

Deal Completed – 2023

Hawsons Corporate Finance had the pleasure of supporting Hi-Tech Automation Limited (“Hi-Tech”), a well-established automation intelligence company, during its transition to Employee Ownership.

The company, based in Kettering, Northamptonshire, provides reliable automation solutions to customers across a variety of sectors and industries.

The directors of Hi-Tech approached us following their own, independent, research into EOTs, due to our wealth of experience in lead advisory on Employee Ownership transitioning.

The exiting shareholders’ succession strategy was clear – they wanted to ensure that the company was left to the current employees to steer and grow the business and that the employees themselves should benefit from this future growth. As such, a trade disposal didn’t align with this vision, and the shareholders understood that a transition to Employee Ownership would be much more beneficial for the employees as a whole, whilst providing the exiting shareholders with a smooth, and tax-efficient, departure.

An already driven and ambitious team, the employees of the business are now even more motivated and empowered to grow, and shape the business, and benefit from their well-earned share of future profits.

Hawsons Corporate Finance were engaged to project manage the entire process, which included:

• Independent expert valuation of the business to determine a fair market value;
• Assistance in structuring the deal, including detailed financial forecasts to determine a suitable repayment model for the deferred consideration;
• Obtaining advance tax clearance from HMRC to gain comfort on specific and complex tax areas of the transaction;
• Sourcing and working in tandem with the chosen lawyers to provide a seamless service, including an additional tier of review of the legal documents to ensure that the EOT conditions are met in order to qualify for the tax relief.

Hawsons Corporate Finance, acted as lead advisers with legal services provided by the Sheffield office of Knights Plc.