Employees take ownership of Dundee building company

Scan Building Services directors Graham Prophet (front centre with navy coloured jersey) and Mark McKenzie (front centre, tie and white shirt) with other staff on Dundee Law

A Dundee-based building engineering services company has completed its transition to become Scotland’s latest employee-owned business, with 56 members of staff becoming owners.

The process to employee ownership of Scan Building Services Ltd saw previous owner David Anderson sell 100% of the shares to an Employee Ownership Trust, which is holding them on behalf of the employees.

The deal was structured in order to make it affordable to the business without affecting its ability to reward the team and reinvest for the future. The plan is to also introduce an Enterprise Management Incentives (EMI) scheme for senior management.

Founded in 1980, Scan Building Services Ltd operates in the construction industry as a specialist contractor, providing services such as heating, ventilation, air conditioning and plumbing systems. Servicing clients in the Dundee area and beyond, the company’s experience ranges from installations in domestic properties to major commercial and industrial buildings. Scan Building Services’ clients include construction contractors, local authorities, health trusts and private companies. It has an annual turnover of £3.9 million.

Graham Prophetpart of the senior management team at Scan Building Services, said: “Throughout the years we have endeavoured to provide the best possible quality of products and services to our clients and to pride ourselves in the standard of the work we provide.  To do this we employ a highly skilled workforce of dedicated and local craftsmen, many of whom trained through the company’s apprenticeship scheme. So when we were considering our options for future ownership of the business, we wanted to ensure the jobs were retained in Dundee and the staff were rewarded for any success. Employee ownership ticked all of those boxes and following a feasibility study last year, we knew it was the best option for us.

“A fair price was achieved for the previous owner that also ensured sufficient reserves were left in the company to provide working capital to invest for the future.

“We notified the staff early on in the process and made sure they were involved and updated as the project progressed.  All employees now have a real interest in the success of the business which will motivate them to perform and achieve.”

Scan’s previous owner, David Anderson, added: “Henderson Loggie has been a valued adviser to the business and the team’s advice has helped it to grow over two decades. Rod Mathers suggested this very effective structure which met my objectives and allowed ownership of the company to pass to the employees, who now have a vested interest in making it the best company it can be and to benefit directly from their efforts. The team at Henderson Loggie guided us through the whole process from feasibility stage right through to completion most efficiently. I’m very proud of the way things have worked out and I wish the new owners of Scan every success for the future.”

The transition was supported by Co-operative Development Scotland (CDS), with the process managed by Henderson Loggie.

Rod Matherspartner at Henderson Loggie, said: “Employee ownership is a very tax efficient option for business owners to realise their investment and pass ownership on to employees to reward and motivate them to continue to grow the business. Henderson Loggie has been Scan’s advisers for over 20 years and we’re delighted to have assisted them with this transition.”

Sarah Deasdirector at Co-operative Development Scotland, the arm of Scotland’s enterprise agencies which promotes employee ownership, added: “The previous owner, along with the senior management team, wanted an ownership solution that not only ensured the business remained rooted in Dundee, but also that the long-serving members of staff would be rewarded for future success. By becoming employee-owned, the company is meeting those objectives and more.”

CDS said statistics consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability; improved business resilience during times of recession; increased productivity brought about by higher levels of engagement and enhanced employee wellbeing.

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