Credit and political risk insurance broker Texel Group has completed its transition to 100% employee ownership, a move it says will preserve its long-term independence.
London-based Texel completed the buyout through an Employee Ownership Trust (EOT), a legal entity in the UK that owns a controlling stake in a business on behalf of its employees.
The company was previously owned by Andy and Sarah Lennard, who co-founded the business in 1997, and other employees.
William Shaw, deputy chief executive, tells GTR that Texel has “always been conscious of a time when the ownership of the company would need to change”, and that the transition has been in motion for a “couple of years”.
Shaw says the benefits of an EOT are that “everyone in the business is a stakeholder – they share in the company’s success, and we can preserve our culture and values for future generations”.
According to HMRC, EOTs also allow company directors to sell a controlling stake in the business to employees without paying capital gains tax, and allow employees to receive a bonus of up to £3,600 a year tax-free.
There will be no change to the company’s day-to-day operations, Shaw says.
Texel says in a statement that the move ensures its independence, “protects its unique culture and directly rewards the dedication and hard work of its employees”.
Shaw adds that the change also enables the company to continue “the phenomenal work of the Texel foundation”, noting that Texel has long donated 10% of its net profits to the foundation, which supports charities and social enterprises.
Chief executive Andy Lennard will remain in post, and there are no plans for him to step back “in the near term”, Texel says. “Over the years we have attracted like-minded people who have contributed enormously to the company’s extraordinary growth,” Lennard says. “We know what it is to be a Texelian, where the journey is more important than the number or the profit.
“The creation of the EOT not only allows us to remain independent, it allows us to move from a shareholder to a stakeholder model and to continue the extraordinary work of the Texel Foundation.”
Last March, previously fully employee-owned trade credit insurance broker BPL secured a minority private equity investment that it said would bring “financial firepower” to the company.
