A 144-year-old Scottish company has revealed a move to employee ownership, flagging the effect of retaining independence and “safeguarding” staff in a sector in which it noted many businesses are acquired by larger competitors or outside investors.
Scottish premium bakery and confectionery ingredients supplier R&W Scott, based at Carluke in Lanarkshire, was the subject of a management buy-out by its current leadership team from Real Good Food in 2018.
The company said yesterday that this team had “delivered on their five-year growth plan to arrest losses, safeguard employment, and achieve annual earnings before interest, tax, depreciation and amortisation (EBITDA) of £2m”.
R&W Scott announced that, from July 8, it “will be operating under an employee ownership trust”, declaring: “Under this new structure, all the company shares are acquired by the EOT for the benefit of employees - allowing R&W Scott staff to participate in and influence the company’s future direction without having to directly own or buy shares.”
It added: “The decision to create this new structure was driven by the desire to sustain the company’s independence and recognise that R&W Scott’s success was built upon the hard work and commitment of employees.
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Clare McNeil, commercial director of R&W Scott, said: “Many businesses in our sector are acquired by larger competitors or outside investors as they grow. To safeguard employment here and continue to deliver sustainable growth, we’ve created the R&W Scott Employee Ownership Trust.
“Since we bought the business in 2018, we’ve delivered year-on-year growth, and our plan is to maintain that trajectory for the long-term benefit of our employees.”
R&W Scott said that, operationally, its senior leadership team, including managing director Stephen Currie, Ms McNeil, and finance director Michael Hewitt, will continue to oversee the day-to-day operations.
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It added that John Easton would exit the business but would “hold a position on the trust board representing the outgoing shareholders”.
R&W Scott revealed its management team has “opted to secure external funding to speed up the EOT transition process”.
It said that it was introduced to specialist bank Shawbrook by adviser HNH Group.
R&W Scott added: “Shawbrook will be providing a hybrid funding facility, combining asset-based lending with a property and cashflow loan to support the acquisition from the original owners and assist with R&W Scott’s continued growth plans.”
Mr Hewitt said: “The decision to move to employee ownership feels right for our business right now, and we want to make this move as seamless and effortless for everyone involved. Working with a funder like Shawbrook who understands the processes and requirements is central to meeting this objective.”
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David Cayzer, director at Shawbrook, said: “As more and more business owners consider succession planning and retirement exits, EOTs have become a more prevalent option in the market, and we have supported a wide range of organisations with funding to fast-track these transitions. We are delighted to be working with Michael and the team at R&W Scott with funding for their EOT and look forward to seeing the business grow as it progresses through this exciting stage of its journey.”
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