Damia Group

Chris and Pat had been through ownership changes, specifically an MBO before, and understood the possible disruption it can cause. An EOT provided an appealing exit option for the founders due to them being able to transfer anything from 51% to 100% control of the business to its employees; empowering them to drive growth and shape the future of the company; as well as providing some substantial tax benefits.

Damia Group has bold plans for the future and as well as attracting future talented employees the EOT suited the company’s next strategic steps. The company is adding managed services to its offering and engagement of staff was paramount to its success. EOTs provide a tool to unite employees for a common purpose, and as a result, put a business in a much stronger position for change.
Price Bailey’s corporate finance team were instructed to advise on structuring and financing the transaction. A valuation had been completed prior to our engagement, which during our due diligence process displayed some discrepancies in its calculations. Our team made the necessary corrections, analysing previous transactions within the sector and a previous trade sale offer, and focused on producing a transparent, fair valuation of the business for both parties. Structuring the EOT for the long term benefit of the company was important to both parties and they were keen to explore all avenues. Once the structure had been confirmed Price Bailey created a detailed repayment schedule providing comfort to the ongoing team they had sufficient liquidity to achieve their future strategy.

Utilising Price Bailey’s experienced tax team, we ensured that the proposed structure and supporting documentation met all the criteria required for an EOT approval by HMRC.

From engagement to completion took four months. A lot of planning and thought goes into an EOT creation and execution, so it is by no means an exact indication of a timeframe. But one thing is clear the right advice and expertise does make the process much smoother.

Simon Blake, head of corporate finance for Price Bailey:

“Congratulations to the Damia team, a successful company with a bright future. EOTs are a fantastic tool but should be carefully constructed and be the right thing for the business and the employees. The initial early-stage discussions can be detailed but we enjoy tailoring a strategy that produces the best outcome for both parties.”