WJM Assist Firm in Transition to Employee Owned Model

Our corporate team recently assisted in the transition of a construction company to an employee-owned model.

From humble beginnings in 1974, Tough Construction is now one of the largest employee-owned organisations in Scotland with over 500 employees.

Bob Leishman, George Duncan, and Kenny MacKenzie took the reins at Tough Construction after a management buyout in 2007. Now, after 16 years as shareholders, they have successfully retired. Like the previous owners in 2007, they looked internally to pass the torch. When considering their options, it became clear that rather than opting for a management buyout, employee ownership was a strong possibility for Tough Construction’s future.

The Employee Ownership Trust (EOT) model does not involve direct ownership by staff, but instead, a controlling interest is transferred to a trust for the benefit of employees.

Co-operative Development Scotland explain that employee ownership allows owners to exit at their own pace, safeguard jobs, and improve employee engagement. It can also offer a good price upon exit as Profits from selling to an EOT are effectively exempt from Capital Gains Tax.

Responsibility is now on the new board with Alistair Lauder as managing director, Craig Lavery as construction director, Gillian Beaton as procurement director, Gary Hassan as commercial director, and Mhari Greer as finance director.

Colin Millar, head of WJM’s corporate team, said: “Our work in the transition for Tough Construction to an Employee Ownership Trust has been an incredibly rewarding experience and stands as a testament to others considering a similar move.

“Our specialist team has a great deal of experience with all types of ownership models and the work with Tough Construction has further exemplified what a seamless transition can look like when the right people, skills and knowledge are involved.”