After many generations of family ownership, agricultural supplier Galloway & MacLeod chose to move to employee ownership to fuel the firm’s ambitious plans for growth.
Galloway & MacLeod has been a family business since 1872, selling animal feed and agricultural supplies across the UK and Ireland. Third-generation chairman Ralph MacLeod wanted to grow the company’s turnover from £10m to £20m in three years. To achieve that, he needed to make organisational changes, and plan for succession.
With no family successor, Ralph was interested in employee ownership as a way to guarantee the company’s future.
On the advice of his Scottish Enterprise account manager, he attended an event on business succession held by Co-operative Development Scotland (CDS). “We wanted to transfer the company from being family-owned to employee-owned,” says Ralph, “and are now very positive about the change process, involving staff at all levels of the business.”
Galloway & MacLeod is now on course to become entirely employee-owned.
How CDS helped: specialist advisers, and business transition support
A specialist adviser from CDS collected business data and carried out a feasibility study. The adviser then set out precisely what would be involved in the transition to employee ownership.
CDS also helped cover the cost of business transition support from consultants at Baxendale.
Funding the transfer
The company set up an Employee Benefit Trust to help fund the transfer – no cash changed hands up front. The trust buys shares from the Macleod family, using company profits. Employees can then buy shares directly, or through a share incentive plan.
Galloway & MacLeod has seen many benefits from the move to employee ownership, which is reflected in the steady growth in turnover. The benefits include:
- Sustainability – transferring ownership to employees keeps the company independent, and allows it to focus on long-term growth
- Succession – with no family member to take over the company, handing it to the people who know the business best makes sense
- Innovation – shared ownership gives employees a real incentive to improve the company’s products, processes, and services
Find out more about employee ownership