As one of Scotland’s leading advisers in Employee Ownership Trusts, we helped New Hopetoun Gardens in Edinburgh continue to blossom by advising them on a transition to employee ownership. Following the success of The Priory Hotel in Beauly’s transfer to employee ownership, this latest deal has secured the future of a successful garden centre, placing the business in the hands of the people who know it best, the employees.
The garden centre which is based between South Queensferry and Linlithgow in West Lothian is known as the ‘garden centre for gardeners’ and is a popular all year-round attraction for both serious and fair-weather gardeners. The café and gift shop which is also part of the business is equally popular. Owners Dougal Philip and Lesley Watson are recognised as celebrities in the world of horticulture. Indeed, the process was slightly delayed as both were judging show gardens at the RHS Chelsea show in May.
The couple had been considering succession planning options for some years. The company had identified a very competent manager, Morag Macrae, and it seemed that all the conditions were right for Dougal and Lesley to begin to plan an exit. A sale to a trade buyer was a possibility, and there were interested parties, however Dougal and Lesley were not convinced that the future of New Hopetoun Gardens, and the employment of its staff, would be secure in the new ownership.
Dougal and Lesley had attended our event on succession planning and heard me talking about the option of a sale to an Employee Ownership Trust (EOT). The EOT provides a tax effective means for business owners to exit their company. If a controlling interest in a firm is sold to an EOT then that transaction is free of Capital Gains Tax.
This option appeared to tick all the boxes for New Hopetoun Gardens. Dougal and Lesley could phase their exit from the business while getting a fair price, the employment of the loyal staff would be secure, and the future of the centre would be in a stable, long-term model
The shareholders decided to transfer the majority of their shareholding to an Employee Ownership Trust that will hold these shares on behalf of the employees. The news was given to staff at a company meeting with an overwhelmingly positive response and employees agreeing that this was the best possible outcome for everyone.
Ewan Regan, Senior Associate in our Corporate team advised Dougal and Lesley on the sale of their very successful garden centre to employee ownership. French Duncan provided accountancy and tax support and Ownership Associates guided the project. Scottish Enterprise provided financial support towards the cost of the transaction.