Thorntons Law LLP was delighted to advise G.S. Brown (Precision Engineers) Limited in its transition to employee ownership.
Des and Mike Brown, owners of prestigious Fife precision engineering company, G.S. Brown (Precision Engineers), have transferred the majority shareholding in the business to the company’s 27 employees.
Following the deal, 70% of the shareholding is held in an Employee Ownership Trust with the remaining 30% being retained by the Brown family, demonstrating the family’s ongoing 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.
Des Brown plans to remain as Managing Director of the business for the medium term.
Des 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 and both my brother and I wanted the business to remain local. 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.”
The second-generation family business was set up in 1974 by George Brown. The business has a worldwide reputation for excellence in precision engineering. Utilising the latest machine tool technology, G.S. Brown is recognised as a progressive company manufacturing high precision engineering components and assemblies, in medium to high volume, for the hydraulics, robotics, telecommunications and instrumentation sectors. The company operates with a state of the art ERP system that gives full transparency of production, costs and resource.
Chris Byrne, a corporate partner at Thorntons, and Neil McWilliam worked on the transaction.
Chris said: “Employee Ownership Trusts provide a tax effective succession solution that allows selling shareholders to achieve a fair value for their business and enables them to plan their exit. Employee ownership is particularly appropriate for successful businesses like G.S. Brown where there is a strong local commitment and a long serving, loyal workforce.”
Des added: “This was a big step for us, and the quality of the advice and support from Chris and Neil was outstanding. We were delighted with the service we received. Everything went very smoothly and I believe we achieved the best outcome for the family, employees, and importantly, G.S. Brown as a great business with a very promising future.”
The transaction was also supported by employee ownership specialists, Ownership Associates UK, and accountancy support provided by EQ Chartered Accountants.