The owner-directors of Buckingham Group Contracting, led by founders Paul and Patricia Wheeler, have sold 100% of their equity into the Buckingham Group Employee Ownership Trust.
The transaction took place on Thursday 2nd September.
At the same time, chairman Paul Wheeler, director Patricia Wheeler, and long-standing group stadia director and partner Kevin Underwood all retire from the board.
Their fellow long-standing partners Mike Kempley (CEO) and Tim Brown (COO) move into the roles of chairman and deputy chairman, and intend to stay involved for five more years and two years respectively.
The new leadership team is fronted by group managing director Ian McSeveney and deputy group managing director Simon Walkley – who have both been directors since 2014 – along with financial director Andrew Kerr (a director since 2018) and group commercial director Richard Plant (a director since January 2020).
The employee ownership trust (EOT) will be represented by a corporate trustee, BGC Trustee Ltd, led by independent chairman Russell Field. The trustee board also has two member directors and two employee directors. The EOT will always retain a minimum 60% equity in Buckingham, allowing for future issue of growth shares.
To mark the transfer of ownership, more than 530 eligible employees are getting a one-off £1,000 tax free bonus. This is in addition to the company’s long-established share bonus scheme.
Paul Wheeler, aged 67, said: “Back in 1987 when the company was first incorporated, I never dreamt that the business, which was originally known as Buckingham Plant Hire Contracting Limited would ever accomplish such remarkable achievements. With growing annual sales revenues nudging £700m for 2021 the business has attained the status of being a large corporate, widely recognised for delivering top quality projects and has become consistently established within the top 20 private construction contractors in the UK. None of this would have been possible without the commitment, skills and dedication of our staff members, our management teams and everyone working in departments across the whole business.
“In recognising the amazing results that are now being achieved more than 30-years later, it is wholly appropriate that ownership of the business is being handed down from its founding partners to an all-embracing model of common ownership under the newly established employee ownership trust.”
Business transfers to employees have gained traction as an exit route for company owners since the abolition of capital gains tax on sales to employee ownership trusts in 2014. Construction companies that have been sold, either wholly or partially, to employee ownership trusts since the abolition of CGT on such transactions include Clifford Devlin, McGee Group, Triton Construction, Tonic Construction, Horizon Platforms, Falco Construction and Readie Construction.
Mike Kempley, who moves up from CEO to chairman of Buckingham Group, said: “From the moment that we were first briefed on the employee-ownership model, it was very clear that the legislation and the thinking behind it has businesses exactly like ours in mind. Buckingham Group is perfectly suited to employee ownership which will enable the culture and ethos of the business to continue as the founders pass on the baton to our strong established board. In addition, all our stakeholders’ interests are aligned, and everyone benefits from the overall, long-term success of the business.”
Financial director Andrew Kerr added: ‘’There is no debt funding involved in the transaction, with a prudent initial payment to the selling owners coming from surplus reserves. Consequently, year-end net assets will remain robust at circa £37m in 2021, close to the position in December 2019. The former owners are not motivated by a quick payment timeframe that might undermine the financial strength of the company in any way. Instead, they want to see the business remain financially strong to secure its lasting success.’’