Birmingham based engineering company, Jonic Engineering Limited, has manufactured high quality, hydraulic cylinders, under the same owners, since 1966 and has received accolades including the Queen’s Award for innovation in 2020.
The sale of the company to a trust company, created to act in the interests of Jonic’s employees, is an exciting new chapter for the business, allowing the previous owners to devolve the company into the hands of an entity designed to promote its employees’ interests.
Employee ownership trusts (EOTs) were introduced in 2014 via tax legislation which the government brought in in the wake of the Nuttall review. It is a vehicle which promotes or enables employee ownership of companies, along similar lines to the John Lewis Partnership.
The deal was led by Peter McLintock, partner at Mills & Reeve, who said: “With the client, we explored many options and the EOT sale provided the best options for all concerned. The multitude of benefits from the EOT formula include a smooth evolution of ownership, improved employee relations and the securing of the long-term independent future of your company."
Peter Blakeman, founder of Jonic said “I think one of the most important issues for me - apart from the security it gives to the workforce - was that there was no tax at all which, although a part of the payment was deferred, made the overall deal very much more financially attractive to the shareholders. The process was relatively straightforward and expertly handled on our behalf by Peter McLintock and his team, in particular Joanna Duncan, Chantal Elian, John Kahn, Katie Harman and Victoria Hughes-Barker. My thanks for the support from the Mills & Reeve team.”
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