Arbroath based designer and manufacturer of industrial automation and process control systems, Finesse Control Systems, became Scotland’s latest employee-owned business. The successful electrical & mechanical engineering company supplies to a diverse range of sectors including oil and gas, marine, nuclear & renewable energy, utilities, agriculture, food processing, pharmaceutical, brewing and mines and quarries. The business became employee-owned on July 1st, the company’s 20th anniversary. The announcement was delayed due to Covid19 restrictions.
As owners Fraser and Sheila Dunphy began to consider their retirement plans, they knew their decision would have consequences. The area had seen many companies sold to buyers that ended in relocation or closure. They were seeking a solution that would allow the business to continue to manufacture in Arbroath and maintain the strong customer and supplier relationships that had been built over the years. Importantly, the Dunphys wanted to protect jobs as far as possible.
Fraser and Sheila decided to sell the majority shareholding in the company to an Employee Ownership Trust. This is an increasingly popular exit route for business owners, conferring certain tax advantages on the sellers and on the employees.
The news was warmly welcomed by the company’s 18 staff. “We were delighted to hear of the plans. This is a great place to work and there was always a concern about what would happen when Sheila and Fraser decided to retire” says Lornette Parker, who was recently elected as one of the Trustees to the Employee Ownership Trust. The Trust holds the shares on behalf of employees and provides scrutiny and oversight of the Company Board, ensuring the Board is always acting in the best interests of the employees.
As part of the transaction, the company has committed to donating 10% of future profits to charity. “Finesse has always been a company that has taken civic duty seriously.” Says Fraser Dunphy. We are fortunate to be in the position to be able to give back and improve life for others. It was important to us that this continued.” The company has also committed to continue to recruit and train local apprentices.
Sheila Dunphy adds, “We didn’t want to sell to an external buyer. The employees of Finesse have been loyal to us over the years, and we wanted to repay that loyalty.”
Thorntons Law advised on the transaction. Chris Byrne, a partner in the firm’s corporate team who, together with his colleague, Neil McWilliam, has worked on a number of employee ownership transitions says, “Employee ownership is increasingly viewed as an ideal succession solution for business owners looking to phase their retirement plans and provide a strong platform to enable future growth.”
The company’s accountant, Jonnie Adamson of Henderson Black believes the Dunphys made the right choice for them and for the business. “Finesse Control Systems is more than a place of work. It is a unique business with a culture where people are valued and respected. Keeping the company local was very important to Sheila and Fraser. The Employee Ownership Trust allows them to do that.”
Employee ownership specialists, Ownership Associates project managed the business transfer process. Advisor Carole Leslie says, “It was a privilege working with such a good company and people who are so committed to doing the right thing. Employee ownership is a natural fit for Finesse Controls; the move reinforces all the good things that were already there, and allows the company to continue to flourish providing quality jobs for now and the future.”