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EFES NEWSLETTER - MAY 2024
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First
ESOP/EOT-style business transfer to employees
in Germany
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The
first ESOP/EOT-style business transfer to employees
has been reported in Germany.
The ESOP mechanism has since 1974 been used extensively
in the USA. In 2014, the UK introduced the EOT mechanism,
a kind of simplified ESOP. These mechanisms enable the
ownership of a company to be sold to employees without
them having to pay a penny out of their own pockets.
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Now
Germany has followed suit:
•
Klaus
Eberhardt and Marke Goerke founded the IT company Iteratec
in 1996. In 2018, the founders announced that they were
retiring. At the time, the company employed almost 400
people and had an equity of close to €10 million.
•
The
founders proposed creating a holding company that in
turn would own the company on behalf of all the employees.
The cooperative company Iteratec-Nurdemteam was
set up for this purpose in 2018. The cooperative's name
reflected the founders' desire to sell their company
"only to the team" of employees (in German
"nur dem Team").
•
In
2019, the founders sold a first 49% stake in the company
to the employees' holding company. They provided the
necessary financing to do this. The loan will then be
paid back over the subsequent years through the cooperative's
49% share of the company's profits.
•
In
2024, we are preparing to sell the remaining 51% of
the company to the holding company, just as we did with
the first tranche. The ultimate aim is to complete the
sale to employees by 2027.
In conclusion, the stages observed at Iteratec are very
similar to those that characterise the ESOP/EOT mechanisms
that are becoming common worldwide.
We can do that here too!
See Iteratec and
Iteratec-Nurdemteam for more information
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Press
review
A
selection of 28 remarkable articles in 11 countries in April
2024: Canada,
Czechia, Germany, France, Ireland, Italy, Norway, Slovenia,
UK, USA, South Africa.
Canada: Looking forward to a first “made in Canada”
Employee Ownership Trust.
Czechia: An inventory of the legislation for employee
share ownership.
Germany: The results of the new legislation are not
yet there.
France: Employee share ownership has declined for the
twelfth year in a row. Cocorico for TotalEnergies. Business
transfer to employees for Bousquié.
Ireland: Sinn Féin in favor of employee ownership for
business transfers.
Italy: New employee share plan for ENI.
Norway: A new report from Menon Economics concludes
that employee-owned businesses are a strong ownership model
with many advantages.
Slovenia: Two bills are in preparation.
UK: Thanks to the Employee Ownership Trust scheme,
every day a new SME is transferred to employees. This month,
among others, the case of: Cofficient IT, Associated Architects,
EDC Air Compressors, DITT Construction, Industry Club Recruitment,
7N Architects, CPC Construction Management, BullsEye car parts
and accessories, Liberty Leasing.
USA: Employee ownership trusts are one of the fastest
growing forms of employee ownership in the US, following the
pattern of the UK.
South Africa: Employee share plans have gained ground
in recent years.
The full press review is available
on:
https://www.efesonline.org/PRESS
REVIEW/2024/April.htm
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A
political roadmap for employee ownership in Europe
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