Land Reclamation Company Breaks New Ground

The move by ERS has meant its 28 employees have now become owners of the business.

ERS, which has offices in Bishopbriggs, Edinburgh and Inverness, delivers innovative solutions for the identification, assessment and remediation of contaminated soil and groundwater in the UK.  The company comprises engineers, scientists and support staff, working from offices in Glasgow, Inverness, Edinburgh and Jersey.  It has a turnover in excess of £3m.

ERS was formed in Scotland in 1994 and became a subsidiary of an American company. In 2003 managing director Andrew Mackenzie led a management buyout and ERS became a successful independent, Scottish-based business.

Commenting, Andrew Mackenzie said:  “We are a team at ERS and I wanted to find a more equitable business model that involved all employees in the firm.  We work together to devise innovative and workable solutions for our clients so it was important to me that everyone shared the company.

“I had been attracted to the idea of employee ownership and spent some time researching the structure.”

Andrew attended a number of events held by Scottish Enterprise and Co-operative Development Scotland designed to support business owners considering employee ownership before making the decision to transfer.

Andrew has sold his shares to an Employee Ownership Trust which will hold them on behalf of the employees.  The deal is financed by a vendor loan, repayable over seven years.  Andrew will remain as managing director.

Co-operative Development Scotland (CDS), Scottish Enterprise’s employee ownership support arm, guided and supported ERS’ transition to employee ownership, providing advice on the implementation of the new ownership structure.

CDS director Sarah Deas added:   “It is fantastic news that ERS has joined what is becoming a long and fast growing list of Scottish-based employee owned businesses.  Employee ownership not only delivers proven benefits for the company and the employees, but also helps strengthen the local and national economies.

“Employee Ownership Trusts are fast gaining popularity as an ownership structure.  This is an effective means to align workforce with corporate goals, and harness the creativity and effort of employees to deliver an excellent service.”

As part of the move, the ERS board of directors has been expanded and will report to the company’s Employee Ownership Trust, governed by three Trustees including an employee representative and Carole Leslie, an employee ownership specialist who will serve as an independent Trustee.

Carole Leslie said:  “There is a growing interest in employee ownership and this is the third employee buyout I’ve supported this year.  ERS is a superb example of a successful company adapting its structure to best meet the aspirations of the employees and to secure the future of the company.” 

Andrew Mackenzie believes there is significant growth potential in the business.  He added:  “This is the start of a new journey for the firm.  Most companies, especially in the service sector, are only as good as their employees, and employees are more engaged when they share in the company’s progress.  All we’ve done is find a way to formalise what I’ve always considered to be an essential part of ERS.

ERS was advised on the legal requirement of the move by solicitor, James McGinn, and on the financial aspects by tax specialist John Todd of Johnston Carmichael.

ENDS

For further information, commentary or photography, please contact the CDS team at Smarts Communicate on 0141 222 2040 / 07970834354 or email cds@smartscommunicate.com

NOTES TO EDITORS

There are 79 employee-owned companies in Scotland, with approximately 6,500 employee-owners generating a combined turnover of around £900million.

Research shows that selling a company to its employees, or implementing an employee share plan, can boost productivity, increase employee engagement and keep the business in the community.  

Statistics consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability; improved business resilience during times of recession; increased productivity brought about by higher levels of engagement and enhanced employee wellbeing.

Co-operative Development Scotland (CDS) is the arm of Scottish Enterprise working in partnership with Highlands and Islands Enterprise that supports company growth through collaborative and employee ownership business models. It also works in partnership with other organisations to support the development of community co-operatives such as renewable energy and broadband.

An employee-owned business is one in which the employees hold the majority of the shares either directly or through an employee benefit trust. Selling to employees allows owners to manage their exit and achieve a competitive price whilst safeguarding the long term future of the company.  Employee ownership gives employees a meaningful stake in their organisation together with a genuine say in how it is run.  It roots business in Scotland, drives performance and delivers economic wellbeing.

For further information see www.scottish-enterprise.com/cd  or call on 0141 951 3055.  Follow CDS on Twitter @cdscotland or look at the blog www.cdsblog.co.uk