finance

Employees buy out energy-efficient heating firm



Electric heating distributor EHC Energy Limited has gone into employee ownership after its directors sold a majority stake into a staff share scheme.

The Blantyre firm’s directors Bill Walters and David Stevenson had been transferring day-to-day running of the business to managers and other staff over the last 18 months.

EHC, which installs energy-efficient heating systems for social and private landlords across the UK and supplies plumbing and electrical wholsalers, reported turnover of £3.75 million last year.

Walters said: “The Directors of EHC have actively been looking for a suitable exit strategy for a number of years that would provide a solution which safeguards all parties concerned.

“Various schemes were promoted to us, however we operate a transparent management style and when we discussed the options with the key staff it was agreed the employee share scheme would deliver the best long-term solution to meet our future aspirations. We are delighted that the transaction is now complete and provides stability across the company in these challenging times.”

Law firm Macdonald Henderson advised founder Walters and co-owner Stevenson, who became a director in 2017, on the buyout which has been funded through acquisition finance for an undisclosed amount from Clydesdale Bank. EHC reported net assets worth more than £800,000 for the year to 31 October, 2018 and had secured bank loans of £305,000.

EHC, which was founded in 2005, supplies a range of electric boilers, water cylinders and radiators and advises customers on how to maximise energy efficiency, electricity tariffs and solar power.

The directors said they had worked on a growth plan with staff and expect the business to expand with the move towards renewable electricity sources and the banning of gas products in new-build properties from 2025. EHC reported a 14% rise in turnover last year.

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Walters added: “Following initial detailed discussions with Fraser Morrison we appointed Macdonald Henderson to complete the complex transaction on the directors’ behalf.

“Given the difficulties of the current situation they made great effort to ensure that we received regular updates and successfully completed the transaction on the agreed timescale. We are extremely grateful to both David Beveridge and Colm Kerr for all their efforts”

Ness Gallagher acted for the employees, Harper Macleod for Clydesdale Bank and WDM CA provided accountancy, tax and corporate finance advices.



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