The founder of a West Yorkshire manufacturing firm has transferred ownership of the business to his staff to repay their loyalty and protect their futures in a deal advised by the corporate finance team at accountants and business advisers, Garbutt + Elliott.
He founded JF Plastics in the early 1980s and now the company, which manufactures a wide range of pipe bends for carrying cables and fabricated fittings for the UK-wide construction, power and renewable energy sectors, has a £4 million turnover. Projects the company has supplied include The London Olympics site; London Cycle Scheme, Hinkley Point C Power Station, Hindhead Tunnel and Crossrail.
Managing director John Fieldhouse transferred almost 80% of shares to the firm’s 17 members of staff. He has kept a stake in JF Plastics so his employees can be assured he still has a vested interest in its future, and wants to ‘keep his finger on the button’ regarding quoting for bespoke renewable energy and power contracts.
After considering selling the company, Fieldhouse decided instead to establish an EOT, which were introduced by the Finance Act 2014 to offer business owners considering selling their business to move towards staff ownership instead.
Following the transfer of shares, all the staff at JF Plastics will benefit from annual tax-free bonuses as the business allows.
Tariq Javaid, corporate finance partner of Garbutt + Elliot, which advised Fieldhouse, said: “EOTs are becoming an increasingly popular way to transfer a business and reward the staff who do the work, know the customers and the market.
“They are a good way of generating greater productivity and innovation and we are pleased to have completed this deal successfully with John and JF Plastics.”