Pett Franklin has recently advised MST Systems Limited on its transition to an employee-owned company.

Established in 1995, MST Systems Limited is a highly specialist company which uses broadcast graphics to offer complete sports timing, scoring and analysis solutions for various sporting events such as motor sports, golf, basketball, amongst others. The Company has provided services for the prestigious Ryder Cup, The Open Championship, the Asian Tour, the European Tour, the Euroleague and EuroCup Basketball. Some of the Company’s partners include, Sky, BT Sport and Euro Sport.

Founder David Bettinson has said:

“It would be easy to simply sell to the highest bidder but my aim in seeking a different solution was motivated by my strong desire to enable the company to continue with the established team, developing independently, in harmony and with benefits for everyone. To achieve this, I have sought professional advice from MST’s accountant and Pett-Franklin who specialise in all aspects of employee share ownership including Employee Ownership Trusts (EOT).”

The transaction involved the sale of a majority of the Company’s shares to an Employee Ownership Trust (“EOT”). Similar to the John Lewis model of ownership, the EOT holds the shares on behalf of all employees of the company. The legislation on EOT transactions allows the transfer to be completely free of capital gains tax. Additionally, the transition to an employee-owned company means that the Company’s employees will be eligible to receive annual tax free bonuses of up to £3,600 per employee.

EOTs are increasingly becoming the exit strategy of choice for many entrepreneurs and a way of rewarding employees for their commitment to the growth and success of their companies. It is likely that EOTs and employee-owned companies will become even more common especially as there appears to be increasing government support for employee ownership.