A business that trains personal trainers and sports coaches across the country has become the latest to adopt an employee ownership model.
Leeds-based Strength and Conditioning Education has undergone a seven figure buy-out, supported by a loan from asset manager Mercia.
The deal gives the staff control of the business while allowing founder and CEO Brendan Chaplin to retain a minority share.
Mr Chaplin said: “We are very much a people business. Our staff, led by managing director Paul Dorkings and operations director Dave Christophi, are at the heart of our success and in recent years they have been playing an increasing role in driving the business forward.
“I wanted to empower them further and allow them to benefit directly from its success.”
Strength and Conditioning Education delivers education and development for fitness professionals from 20 locations across the UK.
The Leeds-based business, which specialises in strength and conditioning, trains around 1,000 students each year, ranging from independent coaches to staff from gym chains such as David Lloyd.
Mr Chaplin, who has worked with clients such as UFC fighters, rugby team Huddersfield Giants, British Tennis and England Golf, set up the firm in 2011 and was instrumental in the decision to go down the employee ownership route.
The business has now joined the likes of John Lewis by adopting an Employee Ownership Trust business model.
The deal was supported by a loan from Mercia’s EV SME Loans fund.
Chris Pestell, investment director with Mercia, said: “We would like to congratulate Brendan and the team.
“Employee ownership is becoming an increasingly popular option for businesses, particularly those looking to engage and reward staff, and can be a genuine alternative to a management buy-out.
“We want other business owners to be aware that funding is available to support those going down this route.”
Martin Cooper, Anna Haworth, Ashley Suter and Helen Wood from accountancy firm RSM advised Mr Chaplin on the deal.
Ms Haworth said: “It was great to support Brendan and his team in the company’s journey to becoming employee-owned.
“It’s an exciting time for the business as it embarks on the next step of its growth strategy, with the employees playing a greater role in its success.
“With RSM’s experience as a leading adviser on EOT transactions and our multidisciplinary approach, including leading the fundraising process for the transaction, we were well placed to navigate the company through the complex transition.
“We wish them every success in the future as an employee-owned business.”
The employee ownership sector in Britain grew by 18.5 per cent last year, continuing the trend set by legislation brought in 2014 to provide tax benefits to business bosses who choose this as the preferred option of succession.
Yorkshire accounts for 7.6 per cent of employee owned businesses in this country, according to the Employee Ownership Association (EOA).
The Government published an independent review into employee ownership by Graeme Nuttall in 2012.
The Nuttall review, which looked at how the Government could create a ‘John Lewis economy’, helped establish EOTs in 2014.
EOTs are an indirect employee ownership model.
Shares are held on behalf of employees, usually in a trust.
Trusting in employee ownership
Employee owned businesses can be directly owned or owned through a trust as a result of legislation introduced in 2014.
The Finance Act 2014 enabled businesses to set up Employee Ownership Trusts (EOTs).
Trusts provide a Capital Gains Tax exemption when an owner sells a minimum of 51 per cent of the business to an EOT.Employees can also benefit as bonus payments made through EOTs are tax-free up to £3,600 per employee every year.
Leeds-based industrial door supplier Union Industries, which is employee owned through a trust, earlier this year announced a £3,500 bonus for its staff.