I leave my hard-working staff a really nice long-term legacy. The brand I have worked so hard to create with them over 22 years lives on. They all agree an EOT is a great and exciting future.
Simon Farren - Managing Director, Reverie Ltd.
Reverie Limited is an industry leader in Carbon Fibre composite design, repair and manufacturing. The Shorts Corporate Finance and Tax teams recently helped Managing Director, Simon Farren, with a share disposal via the Employee Ownership Trust (EOT) route, as well as a de-merger.
We caught up with Simon to get his thoughts on the transaction process and his experience with the Shorts team.
How were you first introduced to Shorts?
“I decided to investigate an EOT as an exit strategy for my long-term retirement plan. I found Shorts after searching on Google for EOT. They were there at the top of the page, so I downloaded and read their literature and emailed the team for more information and some costs.
“I received an email back from Pamela, who introduced me to the tax strategy team to discuss timings and the size/share structure of Reverie. Pamela and the team asked me some simple questions about the business and came back with some quotes.
“Shorts also suggested a demerger to pull the properties out of the business pre-EOT, as the EOT was unlikely to be able to fund the share purchase and the property purchase over a sensible repayment term. I also liked this idea as it would give me a long-term rental income.
“I had emailed three other companies advertising EOT services. I decided to go ahead with Shorts and placed a PO with them.”
How would you describe the EOT process?
“The EOT process went pretty much as I expected. It all happened within the timing plan. The timings are all subject to HMRC responding, but even they were timely.
“The Shorts Corporate Finance team was very helpful. They helped us with the valuation report cross checking, as well as journal entries needed for our accounts to show the correct steps and timings in the Demerger and EOT transaction. They also carefully checked my post-EOT cash-flow projections to ensure the Company could pay its deferred consideration via leaving some capital in the business.
“The whole thing was done over the phone, via emails and a few zoom meetings with Shorts and MD Law. I liked the fact we were a small team, including just myself, Shorts, and James from MD Law. I would recommend them to anyone considering an Employee Ownership Trust.”
What are your thoughts on EOT as an exit-strategy?
“An EOT is a win-win as an exit strategy. The negotiations are much easier than a trade sale, as everyone involved in the business knows the business inside-out. They know of any issues that might come up in an external due diligence check. It is also faster and less costly (legally) than a sale. I had a willing team of 3 senior staff that were happy to act as Trustees and take on responsibility.
“An EOT is very tax efficient, as there are no Capital Gains Tax or taxes on “cash” taken so long as certain HMRC criteria are met.
“Most importantly, I leave my hard-working staff a really nice long-term legacy. The brand I have worked so hard to create with them over 22 years lives on. They all agree an EOT is a great and exciting future.”
About the client: Reverie Limited.
Reverie Limited is known throughout the worldwide industry as a an accomplished and skilled Carbon Fibre composite design, repair and manufacturing company. They have over 20 years’ experience in crafting the highest-quality Autoclaved Carbon Fibre composite parts from alloy or Carbon composite tooling.
Reverie branded parts have been used by companies and teams all over the world, including Jordan F1 Grand Prix, AER Engines, Gibson Technology, Citroen WRC, Cosworth Electronics, and Lotus Sports.
- Learn more about Reverie Limited and the work they do on their website.
- You can also see a showcase of the company’s work on their Instagram page.
