Irlam-based independent drinks firm Kingsland Drinks Group, including Kingsland Drinks, and newly established Ten Locks, has made a move to being partially employee owned.
Current director shareholders, Andy Sagar, Karen Wilson, Michael Forde, and Mark Dixon have successfully managed the business for 17 years, investing significantly in capability and capacity and diversifying the business into new markets.
After a period of careful consideration and planning, the owners have agreed that the time is now right to restructure the ownership model while recognising any changes in the stewardship of the business will need support and take time to transition.
After reviewing all the potential options, the shareholders concluded the best outcome was to sell a majority of the shareholding into an Employee Ownership Trust (EOT) structure.
The employee-owned (EO) business sector in the UK is growing, with over 100 businesses transitioning to this model in the last 12 months. Co-owned companies achieve greater sales growth, profitability and productivity compared to traditional business models.
They also have lower debt risks on average, making them more sustainable and resilient to external challenges. EO is a powerful, sustainable alternative to a trade sale as it is positive for the future of the employees, the legacy of the business and the commitment to the workforce and the local community.
The shareholders will remain active in the business as Exec members of the Board and will retain an equity interest while moving the majority – 51 percent – of the company into the EOT, giving employees Indirect Ownership status.
The remaining 49 percent will continue to be held by the owners. There will be a board of trustees, consisting of one external independent trustee, two founder trustees and two employee trustees, charged with looking after the best interests of the co-owners of the company.
The business, including the Board of Directors and Senior Management Team, will continue to function as normal, with The Board of Directors/Leadership Team being accountable to the Board of Trustees.
The company has also agreed new funding facilities in conjunction with its existing provider, NatWest, and a new partner, Wells Fargo. This provides the business with additional funding headroom and the capability to plan for future growth with its stakeholders. The funders have been fully supportive of the transfer of 51 percent of the equity in the group to an employee-owned trust, and the future business plans.
Andy Sagar, Executive Chairman and Shareholder, said, “The four shareholders have put a great deal of thought into the succession of Kingsland Drinks Group as we have a strong legacy of partnership and a family ethic. We have always put employees at the heart of our business and the move to EOT allows our colleagues to feel even more connected to the company, and take pride in building for the future, having a real stake in the success of the business.”
Ian Hiscock, New Chair of the Trust Board added, “I am thrilled to be joining the team at Kingsland Drinks Group as they embark on their employee ownership journey. Having spent my whole career working in and around EO businesses, I’m passionate about the benefits it can bring to a company and the people who make it a success: the employees.”