EOT Case Study – Lyndhurst Cooling & Heating Services

Hawsons Corporate Finance had the pleasure of supporting Lyndhurst Cooling & Heating Services Limited (“Lyndhurst” or “the Company”), a family run commercial cooling and heating solutions specialist, during its transition to Employee Ownership.

Lyndhurst was established in 1988 and became a limited company in August 2005. A Rotherham based contractor providing a comprehensive range of services including reactive, maintenance and installation work. These services are currently provided to a range of commercial clients including independent businesses, hospitals, schools, councils and universities. The company prides itself on building strong relationships with its many clients.

See https://www.lyndhurstservices.co.uk/ for more information.

Hawsons, being the Company’s accountancy firm, was well placed at the onset to advise the shareholders on their exit opportunities, and the corporate finance team, led by Peter Wilmer, was approached due to a wealth of experience in lead advisory on Employee Ownership transitioning and ability to work alongside them towards a common goal.

The shareholders did not wish to proceed with a trade disposal as this did not reward the employees for their hard work and dedication over the 36 years of the Company’s existence. The shareholders did not believe it protected the legacy of the Company, the culture, and the security of the employees’ futures. The shareholders felt that a transition to Employee Ownership would be much more beneficial for the employees, whilst providing the departing owners with a smooth, and tax-efficient, exit, placing an emphasis on rewarding their employees for the hard work and dedication they have shown over the years.

The departing shareholders (and directors), Russ and Julie Oliver, will remain within the business to oversee the handover of the management of the business to the employees, and to provide their knowledge and experience to the new owners. Following the transition, it is envisioned that the employees of the Company 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 departing shareholders.
• 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 (James Burdekin of MD Law) to provide a seamless service, including an additional tier of review of the legal documents to ensure that the EOT conditions are met to qualify for the tax relief.

The outgoing directors, Russ and Julie Oliver, had the following to say:

“We were very grateful to Peter Wilmer and Jack Parker of the Hawsons Corporate Finance team for their assistance and advice as we transitioned towards employee ownership. The process was efficient and expertly conducted and we would highly recommend Hawsons for any shareholders looking to sell their business, especially to an employee ownership trust.”

Hawsons Corporate Finance, acted as lead advisers with legal services provided by James Burdekin of MD Law.