Private equity backed business seeking exit

Business sector: Retail

Turnover: £600m

Shareholder/business goals and challenges

  • Incentivise key management to work towards secondary exit and grow shareholder value
  • Avoid dilution to Private Equity (PE) house’s shareholding
  • Reward management who remain with the business at exit
  • Minimise tax costs on establishment and maximise tax efficiencies on exit returns to management

What we did and achieved

  • Implemented key management share plan using Government backed Employee Shareholder Scheme (ESS)
  • Managed dilution to PE shareholder by creating class of Growth Shares, enabling management to share in a proportion of growth in company value and ring-fencing existing value for PE house
  • Tie-in achieved as shares forfeit on ceasing employment
  • Significant returns to management on exit which were tax free under ESS

About the author

John Dormer Partner

John specialises in employee incentive work and regularly provides advice on the structuring, implementation, maintenance and vesting of management and employee incentive arrangements to both UK and overseas companies of varying sizes.