Employee Buy-out

SME succession planning tends to focus on Management Buy-outs as the preferred option. However, an Employee Buy-out – where the current owner chooses to sell the business to their employees – is often an effective alternative option. 

As an exit planning strategy for business owners, Employee Buy-outs can help achieve a fair value for the business and safeguard the long-term future of the company and its employees. 

Employee Buy-out advisors in Scotland

Consilium Chartered Accountants have undertaken a number of Employee Buy-outs in Scotland, providing an important differentiator for owners in search of an experienced advisor. 

Taking advantage of a multi-disciplinary approach, at Consilium we utilise the skills and knowledge of multiple teams to deliver our Employee Buy-out advisory services. These include:   

• Assessing the business and the viability of employee ownership
• Financial due diligence, business projections and analysis of potential tax liabilities
• Recommending appropriate employee ownership options like a cooperative or employee trust model
• Helping employees understand the benefits, entitlements and obligations arising from employee ownership
• Employee Buy-out financing – sourcing and evaluating funding options for employee ownership
• Managing the Employee Buy-out process
• Post-deal services including tax planning and business planning for the new ownership team. 

Listen to our Corporate Finance partner, Linzi Wilson, as she discusses Consilium’s expertise in taking businesses into employee ownership.

To find out how Consilium can support the transition of your business to employee ownership, contact our Corporate Finance lead Partner, Linzi Wilson.

The advantages of an Employee Buy-out

Though it is a less popular option for business owners than trade sales and Management Buy-outs, employee ownership carries several unique benefits. Many of these advantages have been the motivation for clients appointing Consilium Chartered Accountants as Employee Buy-out advisors.

• Employee ownership can create a highly motivated and engaged workforce. This is beneficial for the new owners, whilst maintaining the legacy of the founder/previous owner
• An Employee Buy-out can be the best option to maintain the business in its current form and help employees retain their jobs
• The risk of the sale failing can be dramatically reduced through an Employee Buy-out model and can be less disruptive to business operations
• Employee Buy-outs can be completed without the need to disclose confidential and/or proprietary information to external parties
• There can be tax benefits available in respect of certain Buy-out types and structures, such as an Employee Ownership Trust. 

For a confidential discussion about Employee Buy-out structures and options, contact lead Partner Linzi Wilson. 

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