How employee ownership transforms businesses

When the main shareholder decided to step back, we helped Fitzgerald Contractors become employee-owned.

Fitzgerald Contractors is a civil engineering firm that employs 120 people and will soon celebrate its 75th anniversary. The business specialises in completing infrastructure across the UK, with an annual turnover of £30 million.

As the majority shareholder in the business, Nick Coley began to think about stepping back from leading and owning Fitzgerald Contractors. Traditionally, this would mean looking for a buyer – either a competitor, an investor or sometimes the current management. But Fitzgerald Contractors wanted a way to secure the future of the business and support the people who make the firm what it is.

How it works

We believe how an organisation is owned reflects its values and can transform how they do business and who benefits. While there are different models for a business owned by its workers, using an employee ownership trust (EOT) made a lot of sense for a sizeable business like Fitzgerald Contractors.

Setting up an EOT means transferring at least 51% of the company’s shares into a trust. The shares are legally owned by a trustee (or trustees) who hold those shares on behalf of all the employees, all of whom can get a profit share of up to £3600 each year which is tax-free. There are tax advantages for the selling owners too, with no capital gains tax payable on the sale price for the shares.

Expert support throughout

There are some things to think carefully about, like the valuation of the business and how the views of employees will be heard in the new structure. But the team at Anthony Collins (AC) know if you get those things right, all the research shows that it can be a real step forward for the business.

For Fitzgerald Contractors, our team advised on the detail of the transaction structure, created the trust and the trustee company, as well as drafting the necessary legal agreements. After being instructed at the start of January, we completed the process by mid-February which meant Fitzgerald could swiftly move on to their next chapter.

The company has placed the future of the business in the hands of its staff who all now share in its success. It’s already clear that it’s been transformative for them and there has been a massive shift in the culture, with employees being more mindful of how materials are used and where costs can be cut.

“When we were ready to go down this road, David and the team from AC made the process absolutely clear, explained the legal documents we needed, and worked really hard to make it happen within our timescale.”
Nick Coley, Fitzgerald Contractors