1. Exit Planning Business Model
06 July 2012
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2. •Vision
•The Process
•Transfer to Employees Business Model
•
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3. Vision
Help business owners in Belgium, France, Italy and the
U.K to find a win-win solution for all the business
stakeholders, the family and the regional economy to
transfer their businesses painlessly and successfully to
their families or to sell them at an optimum price.
Tools:
Awareness Campaigns
Guide on succession planning
Professionals trained on succession planning
Mechanism set up to help micro businesses 'owners to
transfer easily and fruitfully their businesses to
employees or management team
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4. The Process
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5. Employee Transfer
Business Model
To be adapted to country laws
1. Direct ownership.
• employees buy out the owner shares over a period of time. For
instance, if the shares were worth £100,000, then the employees would
pay the owner £20,000 pounds per annum over a five year period.
• use loan finance accompanied by a business plan.
• if the SIP holds on to at least 10% of the shares then the value can be
written off against corporation tax.
• The employees have to buy the shares back or the company can buy
them back and then cancel them at the end of the 10 years if they have
not been transferred.
• The employee control funds out of the SIP if after three 3/5 years it will
be free of any National Insurance Contribution and Income Tax.
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6. Employee Transfer
Business Model
2. Indirect ownership
• Owner’s shares transferred to an Employee Benefit Trust. Company gifts
the money to the Trust.
• EBT can issue shares to the employees or can be held for the benefit of
the company.
• EBT can hold the shares for 125 years. The EBT can receive a dividend
but, or the dividend monies are placed in a Reserve Sinking Fund.
• Trustees are a representative from the business the MD plus an
employee and someone not involved in the business.
• EBT has its own set of accounts separate to the company’s and are often
dormant accounts.
• EBT can issue bonus payments There is minimal tax on money out.
• EBT can purchase property abroad by which the employees can use and
purchase Health Insurance for the use of the employees
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7. Employee Transfer
Business Model
3. Hybrid
• The business funds the purchase of the shares to the EBT with any share
incentive plan (SIP) the EBT issues part of the shares to the employees
and retains part.
• EBT is managed by the trustees.
• As the shares are held through a SIP there is a 10 year maximum holding
instead of the 125 years under plan 2 above.
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8. Management /Employees
Succession Funding
Acquiring an existing, successful business can be financially rewarding, but requires
access to capital we recommend to set up a regional fund made up of 2/3
private and 1/3 public funds.
Who Should the fund invest in?
• an opportunity is identified to buy a regional business.
• the business plan is sound and it meets the fund investment criteria,
• the fund engage discussion on a commercial management succession deals.
• The solutions can be: business loans and/or equity investment for employees or
management successions.
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9. Management /Employees
Succession Funding
A tailored investment to suit the business needs
•Employees/Management successions can arise for a variety of reasons.
• to increase their profits,
• expand into new markets
• consolidate operations in region
• business owner’s retirement
• large business regional closure
•The fund will help the business to finance its ambitions
• Loans
• Mezzanine loans
• Equity Loans
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10. Management /Employees
Succession Funding
Deals the fund can be involved in:
• Internal succession deals, including:
• MBOs (management buy-outs)
• Employee Buy-Outs where an existing management team or workforce
purchases a business from its owners.
• External succession deals, including
• MBIs (management buy-ins) where a management team purchases all of
another business’ shares or assets.
• Corporate acquisitions.
• Appoints a management team of it own choice.
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11. Management /Employees
Succession Funding
Investor Rewards
• the yield will be calculated using the income distributed during the past
year and expressed as a percentage of the mid-market unit or share price
on the date shown.
• expenses will be charged to capital
• The fund will issue dividends, but they may not be invested only in
equities (or shares).
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12. Together we can make the
future what we want it to be
MA Consulting International
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