Beacon Education Partnership EOT Sale (2022)
How RVE advised on the education partnership EOT sale of Beacon Education Partnership completed in 2022, with the corporate finance, tax, legal and trustee work delivered as one engagement.
Deal Facts
“Elaine and Tom at RVE did a great job in supporting our move to EOT and we thank them for making a complicated process run very smoothly. Our team felt very well informed throughout the process and RVE were excellent in ensuring that we understood everything. An EOT has really help crystallise our plans for the future and we would encourage all business owners, particularly those in the training sector, to consider it as part of their plans for the future”
The story of the deal
Beacon Education Partnership, education partnership, completed an Employee Ownership Trust (EOT) sale advised by RVE in 2022.
Beacon’s vision is to deliver quality teaching and learning through a student-centred experience that focuses on the needs of the learner and the requirements of communities and employers. By developing students and staff personally and professionally we hope to inspire a lifelong enthusiasm for learning, that will in turn improve quality of life, promote community cohesion, and prepare students and staff for a constantly changing world.
The business provides training services to healthcare workers in the UK and abroad from their head-offices in North London.
They completed their switch to Employee Ownership in May 2022.
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Case Study - common questions.
Yes. Most founders / controlling shareholders stay on as director (and often as chair or CEO) for between 1-5 years post-completion, then transition to a part-time non-executive or consultancy role. You agree your role and time commitment with the trustee board; there is no requirement to exit operationally. Many founders find the post-EOT phase the most rewarding part of their career, with a clear financial exit having been arranged and a plan for management succession in place.
EOA research consistently shows employee-owned businesses outperform privately-held peers on productivity, profitability and employee engagement. RVE founders consistently report that their businesses perform ahead of plan post-completion, with vendor loans paid down ahead of schedule. The cultural alignment and engagement boost typically delivers measurable productivity gains within the first 12 to 24 months of EO. Growth depends on the business; the EOT structure does not constrain it.
The deferred consideration due to the vendors is repayable from future company profits, typically over a 5-8 year period. So if the business genuinely struggles, the term of the loan note may need to be extended by 2-3 years. In extreme circumstances, some of the vendor loan may need to be written off (eg if the business were to become insolvent).
The vendors do therefore retain business risk relating to the ultimate payment of the sale consideration under the EOT model.
If the business outperforms the original projections however, the vendor loan can be accelerated, and some vendors have been paid out in full within 4 years.
We are happy to talk over Teams or meet to discuss your exit planning.
We can normally assess whether an EOT transaction will be viable and the likely valuation range at our first meeting.
For accountants, lawyers, and wealth managers
Are you working with a client who should be considering a sale of their business to an EOT? We will complement the work you do to deliver an optimal outcome for your client.