Milestone Creative EOT Sale, Design and Branding Agency (2023)
How RVE advised on the design and branding agency EOT sale of Milestone Creative completed in 2023, with the corporate finance, tax, legal and trustee work delivered as one engagement.
Deal Facts
“I'm so pleased we were able to achieve this. The Milestone team is amazing and I couldn't think of a better succession plan. My legacy will be in safe hands. Thanks to the team at RVE Corporate Finance for their expert help and guidance throughout.”
The story of the deal
Milestone Creative, design and branding agency, completed an Employee Ownership Trust (EOT) sale advised by RVE in 2023. Milestone Creative are a highly respected branding and design consultancy based in the South East, near High Wycombe.
They completed their switch to Employee Ownership in September 2023.
Founder and Managing Director, Jay Roff commented:
Link to website announcement.
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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.