DENNY Bros Group has announced plans to transition to an employee-owned business.
The group revealed it has restructured its ownership so that a majority shareholding is now held in trust for the benefit of the employees. A new company, called Denny Bros Trustee Ltd, has been formed to administer the trust while Barry and Graham Denny retain a minority shareholding.
An employee ownership trust is currently used by more than 500 UK businesses and is an arrangement where employees indirectly become the owners.
Denny Bros, which has been trading for 75 years, said the move is designed to ‘safeguard its independent future’.
Denny Bros MD Graham Denny said, “In the last few years, we have come to the realisation that we needed to develop a long-term plan and address what is possibility the toughest responsibility for all business owners to deal with – to plan for our own succession. Traditional options such as selling the business did not appeal as we would lose our all-important independence and we worried that new owners might make drastic changes.
“We pride ourselves on our reputation for innovation and when we discovered the Employee Ownership Trust, it immediately appealed as an innovative way to address the question of succession, giving our staff transparency and reassurance moving forward as well as placing them at the heart of the business. We also think staff will enjoy knowing that they indirectly own the company they are working for – collectively sharing in the success their hard work brings.”
Comprising of 11 companies, the Denny Bros Group is known for printed products including the Fix-A-Form booklet labels. Its other activities cover the likes of engineering, tool and die making, signs and nameplates, conference facilities, property management and machinery sales.
Group chairman Barry Denny added, “Denny Bros has made its name as a world-leader on the quality of the company’s in-house expertise – an achievement that would have been impossible without the contribution of our employees. We believe employee ownership allows for the greatest degree of continuity, stability and resilience among all the possible options we considered. We have ambitious plans to deliver further growth and I look forward to this new model helping us achieve this.”
The restructuring was supported by Birketts LLP and specialist business advisory firm FRP. Lisa Hayward, head of employee incentives at Birketts, commented, “In the wake of a highly uncertain year, employee ownership continues to be an attractive option for businesses across the country who wish to protect their legacy. By offering the very people that built the company a stake in its future, Employee ownership trust arrangements facilitate increased employee wellbeing and in turn, higher job satisfaction and an increase in collaborative behaviours.”
Dave Howes, corporate finance partner at FRP, added, “This deal represents an important milestone in the long-standing history of The Denny Bros Group and means its future will remain in the hands of its employees for decades to come. Employee ownership trusts have risen in prominence in recent years as business owners continue to plan sustainable, long-term exit strategies that add stability to already successful business models. Combined with attractive tax rates, the enhanced benefits for employees mean that the approach should continue to gather pace among SME and family-owned organisations where the ability to leave a positive and lasting legacy is so important.”