EOT Case Study – Lindway Scaffolding Limited

Hawsons Corporate Finance had the pleasure of supporting Lindway Scaffolding Limited (“Lindway”), a family run scaffolding company, during its transition to Employee Ownership.

The company, based in Chesterfield, and mostly serving the East Midlands and South Yorkshire, provides complex scaffolding solutions to a range of projects and companies across the region. The company offers scaffolding services for domestic, industrial and commercial applications. These can range from schools, factories and water treatment works to single dwellings and building sites.

See https://lindwayscaffolding.co.uk/ for more information.

The shareholders of Lindway approached Hawsons following a referral from their external accountant and advisor (Steven Ledger of John Ledger Ltd), due to our wealth of experience in lead advisory on Employee Ownership transitioning and ability to work alongside both Lindway, and their external accountant, towards a common goal.

The shareholders wished to protect the legacy of the company, the culture, and the security of the employees’ futures. It was concluded that a transition to Employee Ownership would be much more beneficial for the employees as a whole, whilst providing the departing shareholders with a smooth, controlled, and tax-efficient, exit.

With the decision to move to employee ownership and the departing shareholders stepping back from their roles as directors of the company, 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 (and departing shareholders) Matthew Brewin and Susan Brewin, have now exited the business, and the company has appointed (internally) a managing director to run the business.

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 along with the extraction of investment property;
• 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, MD Law) and the companies external accountant 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.

The departing shareholders had the following to say:

“We are very satisfied with the process, expertly managed by Peter Wilmer and Jack Parker at Hawsons. The business is in a great place, with a highly experienced and ambitious management team who we wish the very best of luck for the future. We are confident that the business will continue to go from strength to strength and the employees will now be able to benefit from their hard work and commitment over the years”.

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

If you are interested in hearing more about Employee Ownership, or wish to discuss your own exit plans, then please do not hesitate to get in touch with a member of the corporate finance team on 0114 266 7141.