Grierson Dickens EOT Sale, Chartered Financial Planners (2023)
How RVE advised on the chartered financial planning EOT sale of Grierson Dickens completed in 2023, with the corporate finance, tax, legal and trustee work delivered as one engagement.
Deal Facts
“Over the last 24 years, we have built many lasting relationships with clients and professionals; we are incredibly proud of the business we have grown, and the talent we have nurtured. For several years now, a focus of ours has been to prepare for the long-term future of GDL, and we have considered many options. At the heart of our decision, as it has always been, is doing what is best for our clients and employees, whilst protecting the long-term viability of the business. The EOT framework lends itself well to our business; it ensures that our employees are genuine partners in the business, and that our successors, who are already responsible for so many of the accomplishments of GDL, can become the custodians of our proposition.Whilst becoming an EOT is a structural change, you can be assured of ‘business as usual’ with James still doing what he loves, and Jo still very much involved. As we enter the next company year, and this new chapter, we are excited for the future of GDL, look forward to continued success, and thank you all very much for your support.”
The story of the deal
Interview: Gerry Young (RVE) talking through what an EOT meant for Grierson Dickens with one of its founders (Jo Ranger) in April 2023.
RVE advised Grierson Dickens Ltd, a Farnham-based team of Chartered Financial Planners, on its sale to EOT in March 2023.
Jo Ranger, company director, said:
“Over the last 24 years, we have built many lasting relationships with clients and professionals; we are incredibly proud of the business we have grown, and the talent we have nurtured. For several years now, a focus of ours has been to prepare for the long-term future of GDL, and we have considered many options. At the heart of our decision, as it has always been, is doing what is best for our clients and employees, whilst protecting the long-term viability of the business. The EOT framework lends itself well to our business; it ensures that our employees are genuine partners in the business, and that our successors, who are already responsible for so many of the accomplishments of GDL, can become the custodians of our proposition.
Whilst becoming an EOT is a structural change, you can be assured of ‘business as usual’ with James still doing what he loves, and Jo still very much involved. As we enter the next company year, and this new chapter, we are excited for the future of GDL, look forward to continued success, and thank you all very much for your support.”
Related case studies
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.