In late 2022, the Brabners Lancashire team supported Blackburn-based fulfilment partner, Granby, on its transition to an employee-owned business, securing its future independence following the handover of shareholdings from managing director Joanne Kimber.
Since acquiring Granby in 2013, Joanne had been thinking about a suitable strategy for releasing her shareholdings and reached out to us to help put the future of the business in the hands of its employees by setting up an employee ownership trust (EOT). The deal would see its people share a 100% stake in the business.
The EOT model, which has become increasingly popular in recent years, preserves successful work cultures, rewards staff and establishes a framework for long-term growth, while enabling owners to successfully exit a business.
To coincide with Employee Ownership Day on 23 June 2023, run by the Employee Ownership Association, we interviewed Joanne and director of people and finance, Caroline Noblett, to hear about their decision to set up an EOT and how they found the process.
Why did you decide that employee ownership was right for Granby?
Joanne: When I started to look at an exit strategy, I initially worked with Azets (financial advisers) on a trade sale and talked to a number of potential buyers, but I always came away from the conversations feeling a little cold and wondering if it was going to be the right fit for the company.
I had not heard of employee ownership as an option but Azets introduced me to the concept and once I was sold on the idea, they introduced me to Brabners to take on the legal aspects of the transaction.
Was there any hesitation about becoming employee-owned?
Joanne: After meeting with Brabners it was clear that an employee ownership model ticked all the boxes for us and there was no real hesitation, it just felt right.
Jo, how has the transition to employee ownership benefitted your work-life balance?
Joanne: The transition has worked really well, and we’ve managed to make huge steps forward in a short amount of time. My role has changed quite significantly as I’m not needed as much for the day-to-day operations. I’ve been able to drop down from working five days, well more like seven, to three days a week.
Caroline has stepped up and is taking on additional responsibilities, as is Victoria Pittman our head of client services and business development. We’ve got a really strong internal team, and it’s really starting to feel like a shared responsibility which is the purpose of employee ownership. The value I bring is more external, managing client relations, bringing in new business and supporting the team as they move forward.
How did Brabners support Granby during and after the process?
Joanne: We have worked with other legal teams in the past but Brabners stood out to us immediately as it was clear they did not just see this as another transaction but recognised that it was a big deal for us. They went above and beyond to provide ongoing assistance and advise on how best to support our employees with the transition, drawing from experience of similar deals in different sectors.
With Granby being an SME, it was important that we got the deal done quickly so we could resume normal operations, Brabners understood this and met our deadlines. Once the deal was done, they continued to engage with us to make sure everything was running smoothly.
How does the trust work and how were the shares transferred?
Joanne: Part of the process involved setting up an employee ownership trust with its own board that included Caroline, Andrew Gregson our operations director, an external independent representative and an employee representative. We then transferred 100% of the shareholdings to the trust, and once the business costs and other obligations have been paid, any surplus profits can be shared equally with our employees.
Caroline: We paid out the first bonus in April, which was a great feeling.
Was it important to Granby to work with a legal firm which understands the region?
Joanne: Yes, it was important that we worked with a local firm who could attend in person meetings and shared a passion for Lancashire businesses like we do.
Now we see them at the same events, conferences and award shows so it’s an ongoing relationship and they really champion our brand.
Granby won the Lancashire Business View Award at this year’s Red Rose Awards. How important do you think the employee ownership journey was in winning this?
Joanne: It was really special and felt like the cherry on top of the whole process. We entered three categories and were unsuccessful due to the high calibre of businesses applying but were told the decision for the Business View Award was unanimous. The amount of people we spoke to at the event interested in employee ownership was unbelievable, everyone was asking for more information.
Caroline: I think the way businesses conduct themselves, whether it’s through social value or community outreach, is extremely important and we are seeing a transition of putting people over profit.
What sort of legacy do you want to leave for Granby, and where do you think the company will be in five years?
Joanne: I want Granby to continue operating on a sustainable basis, paying employees a decent wage and ensuring development within the team, that’s a legacy which does not change with the deal.
Caroline: We’ve talked about growth and potentially moving to a larger premises which would be a huge step for us. But for us, the focus is not so much on profit but more on people and making sure they have a good standard of living.
Joanne: One of the strands Caroline is currently looking at is growth by acquisition, so we are putting ourselves out there to see if that’s a safer option, and we are actively looking for acquisition and to put our Granby stamp on that. It feels like that’s possibly the best option for the future of the business, but ultimately, it’s up to the leadership team to decide.
Do you have any advice for companies considering employee ownership?
Joanne: If it’s a financial transaction you are looking for then employee ownership is not for you, a trade route would be better. There are tax benefits, but you should not be doing it for financial reasons, it’s more about shaping the future success of the business.
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