Focusing on Employee Ownership yet being experienced across the wider corporate finance deal spectrum, RVE are ideally qualified to advise on whether a sale to an employee ownership trust makes sense for your business.
“When I started to examine the options to realise value for my business, it became clear that the traditional exit route of a sale to a competitor or a financial buyer would not achieve my goals. Since becoming employee owned the business has continued to thrive. Gerry gave excellent advice, structured the transaction effectively, and was extremely professional and efficient at managing the whole process.”
The owners of the business sell their shares (at least 50.1%) in the company to a trust (the EOT) at a fair value – determined by an independent valuation. The purchase price is paid by the EOT over time (typically 2-7 years) from the after-tax profits of the company, effectively an ‘earn-out’ structure. The EOT becomes the owner of the company and is administered by trustees on behalf of the employees. The trustees typically include the previous business owners, an independent chairman plus employee representatives.
Employee Ownership is proving a highly successful business model. It builds on the existing strengths of the business and people that helped build it and work within it. The business owners realise a fair price whilst ensuring the business continues to grow and prosper for the sake of employees and clients. The business owners can plan to phase out their involvement to suit personal circumstances, remaining involved for a time and in a capacity that makes sense for all involved.
What are the qualifying Conditions?
For more information on how an EOT transaction works, see “Frequently Asked Questions”.
John Lewis is the best known and most quoted, employee owned example but the number of smaller, employee-owned businesses in the UK, across a wide range of sectors, is also steadily growing with the SME sector growing much faster than large enterprises.
The Employee Ownership Association (EOA) represents organisations which are employee owned or transitioning to employee ownership across the UK. Most businesses that are moving into employee ownership become members of the EOA.
RVE is a full Supporter Member of the EOA
RVE is a corporate finance advisory firm which focuses on advising owners of small and medium sized companies (“SMEs”) on the sale of their business.
What makes RVE different is that it specialises in advising on and structuring employee buyouts, where the owners sell the business to a newly formed employee ownership trust (“EOT”). RVE has considerable experience of EOT transactions and with RVE’s in-house legal capabilities it can provide clients with a full-service advisory team from inception to completion of any EOT transaction.
RVE was founded in response to the growing number of EOT transactions and the need for specialist advice. RVE expects this growth in transactions to continue as business owners become better aware of the significant tax and commercial advantages that an EOT transaction offers, as well as the benefits and incentives that becoming employee-owned bring to the business and its employees.
The team at RVE includes experienced chartered accountants and corporate finance advisers who have previously worked together at PwC Corporate Finance.
When RVE is appointed it works with the business owners to understand the business and their goals and helps determine the most suitable exit route. If the most suitable route is not an EOT transaction then RVE has the experience to advise the business owners on alternatives, whether for example a trade sale, private equity funded management buyout or vendor funded management buyout.
RVE is a member of the Employee Ownership Association.
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