Trust set up
Fife engineer GS Brown opts for employee ownership
Back, L-R: Alistair Gibb – Ownership Associates, Dougie Rae – EQ, Neil McWilliam – Thorntons, Chris Byrne – Thorntons; Front, L-R: Des Brown, Mike Brown
Fife engineering firm GS Brown has opted for employee ownership in a move that secures the business in its Ladybank location.
Owners Des and Mike Brown transferred 70% of the company’s shareholding to an employee ownership trust for the benefit of the 45-year-old company’s 27 staff. The family will retain the remaining shares as a commitment to the business.
One of the conditions of the deal is that any future sale of the company requires the agreement of 80% of the workforce.
The move was part of the succession plans for the family owners. Des Brown plans to remain as managing director for the medium term and with Mike semi-retired both brothers wanted the business to remain local.
Des Brown said, “The majority of our staff have been with us a very long time. We have our reputation and our customers because our staff do a very good job. A sale to an external buyer would have been too disruptive. By transferring to an employee trust we have a long term structure where we can continue as before, and maintain our relationships with customers and suppliers.”
Dougie Rae, Partner at EQ assisted the company with reaching a fair valuation, and advised on the trust tax benefits.
The transaction was also supported by employee ownership firm Ownership Associates UK, and legal advice was provided by Thorntons Law.