Cheshire-headquartered Precision Facades is now operating as an Employee Ownership Trust (EOT).
Managing director, Steve McGowan, said: “Transitioning to an EOT felt like a natural next step. We wanted a structure that rewards everyone who has contributed to our success and ensures they share in the future of the business.”
Since its founding nine years ago by McGowan and fellow director James Lovell, Precision is today a national building contractor, with revenue exceeding £30 million and currently boasting an order book of more than £60 million through to 2028, as well as a strong pipeline of upcoming work.
Operating primarily in the Midlands and North, previous projects by the business include supporting PJ Livesey to provide 48 apartments at the Siemens Campus in West Didsbury, Manchester, as well as works at the Stockport Interchange mixed-use development, and the Sherlock Street development, a 30-storey tower and seven smaller blocks, in Birmingham city centre.
Under the terms of the EOT, McGowan and Lovell have agreed to remain “actively involved” in the business, supporting operations and the new employee-owners.
“We remain committed to serving our loyal customers, working collaboratively with our supply chain and continuing to embrace local community initiatives and sponsorships,” the men said.
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How does it work?
The EOT model is a relatively new concept that has only recently begun to gain greater popularity among predominantly family-owned and operated construction companies, who are seeking a way to keep their businesses trading long after they step aside, while preserving its unique culture and values and serving its incumbent stakeholders.
The initiative was first introduced into UK tax law in 2014 by the coalition government in power at the time, allowing the owners of a construction company to transfer a controlling interest in their business to the workforce, without the burden of paying capital gains tax.
And despite changes to the legislation announced in the Autumn Budget last year, the principle remains broadly the same today: owners sell the business to the EOT, debt free, and in return they receive a payment in two separate tranches – the first upon completion of the transaction itself, with the remainder deferred over sometimes many years and subject to the performance of the company over that period.
Other construction firms that have recently transitioned to an EOT model include Gilbert-Ash, steel bridge specialist Nusteel Structures, and John F Hunt Group.
Legal
RSM UK provided structuring and tax advice, in transferring total ownership of the business to Precision Facades’ 46 staff, with support from business advisors, Ellis & Co.
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