2021 was another bumper year for Employee Ownership Trusts
In spite of the challenges of the pandemic, or maybe because of it, 2021 has shown that the momentum for Employee Ownership Trusts (EOTs) has continued to increase, according to flash results of the EOT Survey, created and tracked by RM2 for the Employee Ownership Association.
There were at least 210 new EOTs established in 2021. This brings the total number of extant EOTs to over 700.
“EOT Transactions are an elegant solution to succession planning and the challenges that owners have when selling their businesses. RM2 envisage a day when EOT Transactions are a mainstream route to sell your business. Taking this into account we expect the total number of EOTs to motor past 1,000 during 2022.” said Richard Cowley, director of corporate finance at RM2.
There are several reasons why EOTs continued to be attractive as a tax efficient exit route for business owners in 2021. EOTs can be arranged quietly and efficiently with a high degree of certainty. EOT deals can be structured to give fair value to the selling shareholders whilst also protecting the company.
The above numbers are provisional and subject to change as more data trickles in. We will publish a more comprehensive analysis later in the year.