Precision engineering firm GS Brown Limited has moved to an employee ownership structure to secure the future of the company in Fife.
Established in 1974, the Ladybank company is a second generation family business with a worldwide reputation for engineering excellence.
Owners Des and Mike Brown have transferred the majority of the company’s shareholding to a trust for the GS Brown’s 27 employees.
The family will retain a 30% stake in the firm.
Des Brown, who plans to remain as managing director in the medium term, said it was important to him and his brother that the company remained in Fife.
He 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.”
He added: “We are more than happy with the outcome and believe GS Brown is now in a strong position to continue to grow and meet the opportunities of the future.”
One of the conditions of the deal is that any future sale of the company requires the agreement of 80% of the workforce.
EQ Chartered Accountants LLP assisted the transaction by providing a fair value on the business and advised on tax benefits.
The transaction was also supported by employee ownership specialists, Ownership Associates UK. Legal advice was provided by Thorntons Law.
Dougie Rae, partner at EQ, said: “The employee ownership trust is certainly one route worth considering for business owners considering their succession options.
“A sale to an employee trust can deliver a tax effective means to realise reasonable market value in the company, whilst allowing the owners to decide on the pace and form of their own exit.
“It’s good news for employees – they can effectively own the business without having to raise their own funds.”
Utilising the latest machine tool technology, GS Brown provides high precision engineering components and assemblies for the hydraulics, robotics and telecommunications sectors.