A coatings company with 85 staff has adopted the John Lewis and Richer Sounds model by becoming employee-owned.
Northpoint, which is based in Dukinfield, Greater Manchester, was founded in 1976 and since a management buyout in 2007 had been owned by directors Garry Marshall, Philip Dawson, Simon Quiligotti and Howard Tomes.
Now their shares have been transferred to an employee ownership trust.
Northpoint is a £6.25m-turnover business which specialises in protective coatings for steel fabrications, including galvanised steel fencing, industrial pipework for water treatment plants and oil and gas transmission systems, and street furniture.
Garry, Simon and Howard remain as directors under the new structure while Philip has moved to a consultancy role.
Senior manager Tony Holt and senior production manager Philip Butterworth are now deputy managing director and operations director respectively and have joined the board of trustees, which is chaired by Philip Dawson.
Neil Smith, managing director of recruitment and payroll services company Kinetic, which became employee-owned last year, has joined the board as an independent director.
Ben Bradley of HURST Corporate Finance and Liz Gallagher of HURST’s tax team advised the shareholders on the creation of the employee ownership trust.
Paul Johnson and Rachel Clarkson, of Ward Hadaway, provided legal advice.
A seven-figure funding package was arranged by HSBC UK’s Sam Roden and Tim Hodson to support the establishment of the EOT.
Employee ownership trusts were introduced by the government in 2014 and HURST has set up a specialist team to advise on their creation. Last year HURST steered Kinetic through the process.
Ben Bradley said: “The shareholders of Northpoint were keen to preserve the company’s ethos of active employee participation and an EOT was the ideal way to achieve this goal.
“It’s a model which is being increasingly adopted in the UK and has been shown to boost profits, productivity, job security and employee wellbeing.
“Employee-owned businesses are increasingly at the forefront of innovation and we wish everyone at Northpoint well for the future.”
Philip Dawson said: “It felt the right thing to do for the shareholders to pass the business on to the workforce and an EOT seemed the appropriate way of achieving this.
“It’s our view that, as our people gain knowledge and understanding of how the business runs, they will flourish.
“Whenever people previously excluded from the strategic decision-making process are included, in our case the general workforce through an employee forum, then everyone in the business benefits.
“It’s a cliché but nonetheless true to say that our people are Northpoint’s most important asset. We treat listening to the workforce as the centrepiece of our commitment to respect, engagement, growth and profitability, which ultimately is the goal of an EOT for the benefit of all employees.
“We also recognise we have some great leaders who have the character to lead Northpoint through the next phase of its journey.”
Sam Roden, business banking area director for Greater Manchester at HSBC UK, said: “I am delighted that we’ve been able to provide the funding required to support Northpoint’s transition to an EOT.
“HSBC UK has a team of experienced relationship managers who are available to visit any SMEs considering a change of control through an MBO or similar transaction.
“We started our partnership with Northpoint in 2017 and, since then, we’ve been impressed by its progressive outlook on growing the business to the benefit of its workforce.
“The team has a wealth of experience which, coupled with their desire for growth, will only lead to exciting opportunities in the future.”