Home Utility Group transition to Employee Ownership – Case Study

Hawsons Corporate Finance had the pleasure of supporting Home Utility Group Limited (“HUG”), a well-established heating, ventilation and air conditioning (“HVAC”) systems distributor and installer, during its transition to Employee Ownership.

About Home Utility Group

The company, based in Leeds, but serving nationwide, operates an online platform where customers can seamlessly find their perfect heating and cooling system, and select a time slot for installation by a fully qualified installer, often within 24 hours of order. The company offers a wide range of heating and cooling solutions using both conventional systems such as gas and oil boilers, to more greener and contemporary systems such as heat pumps and solar, for both the domestic and commercial markets.

See https://hugboilers.com/ for more information.

Why did Home Utility Group decide to become an Employee-owned business?

The directors of HUG approached us following a referral from their existing accountants and advisors (SMH Jolliffe Cork), due to our wealth of experience in lead advisory on Employee Ownership transitioning and ability to work alongside them towards a common goal.

A trade disposal did not align with the shareholders succession strategy as the shareholders did not believe it protected the legacy of the company, the culture, and the security of the employees’ futures. The shareholders understood that a transition to Employee Ownership would be much more beneficial for the employees as a whole, whilst providing the departing owners with a smooth, and tax-efficient, exit.

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. The directors, Kevin Carney and Neil Davis, have remained in the business to ensure a smooth transition and continuity of performance in the short to mid-term, due to their wealth of experience in the field.

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 (CMP Legal) and existing accountants (SMH Jolliffe Cork) 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.

Managing directors Kevin Carney and Neil Davis had the following to say:

“We were delighted with the service provided by Peter Wilmer and Jack Parker of the Hawsons Corporate Finance team as we transitioned to employee ownership. The process was well managed from start to finish and we would highly recommend Hawsons for any shareholders looking for an exit strategy, in particular via an employee ownership trust.”

Hawsons Corporate Finance, acted as lead advisers with legal services provided by CMP Legal.