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International law firm Fieldfisher has advised technology consultancy business Cambridge Design Partnership (CDP) on its successful transition into a fully employee-owned (EO) company.
The equity in CDP has been transferred into an employee ownership trust, financed in part by a loan from Barclays which was completed this week.
Under the new ownership structure, CDP’s 10 partners will continue to manage the company while staff will have a say in business decisions through an elected employee committee.
A committee member will be invited to attend every monthly management meeting to encourage more responsibility and involvement in the direction and running of the business.
The move will give all staff the opportunity to share in the profits of CDP, which was set up 22 years ago by three engineers in Toft, Cambridgeshire. Since then, the company has grown to employ around 120 scientists, both in the UK and at the company's office in Palo Alto, California.
Being employee-owned means CDP has the flexibility to accelerate its further expansion, without the involvement of external shareholders, and reinforces the company's status as a key local employer in the Cambridge area, fostering the skills of locally-trained engineers, digital experts and designers as well as support staff at its Toft HQ.
CDP's reasons for moving to EO tie in with new research that demonstrates an employee ownership "dividend" (The Ownership Dividend). Over the past 12 months, an independent panel of senior business leaders and industry experts found clear evidence that employee ownership can deliver outcomes that are significantly beneficial and, together, constitute a dividend. This ownership dividend pays off at three levels: for individual workers, for businesses, and – most critically – for the wider economy.
Fieldfisher's team advising CDP was led by partners Graeme Nuttall OBE, Neil Palmer and Robin Spender, supported by senior associates, Beth Walters, Jennifer Martin and Igor Stermsek and company secretary, Nick Currie.
Fieldfisher tax and structuring partner, Graeme Nuttall OBE, explained that:
“Cambridge Design Partnership has moved to employee ownership because of the benefits for the local economy, the business itself, its clients and, of course, its employees.
"CDP is a leading company among the world-renowned Cambridge technology cluster, winning the high growth award in the Cambridge News Business Excellence Awards 2018.
"The company believes that EO will help it sustain and build upon its success to date. Staff are about to see an early sign of the benefits of EO, when they receive their first cash profit share as employee owners. This is income tax-free up to £3,600 per tax year, per individual.”
Mike Beadman, founding partner of CDP, said:
"As a technology consultancy business, CDP recognised that people were the real value in the company and the key to future growth, so transferring ownership to the employees was the most logical progression.
"For the clients of CDP, EO demonstrates the commitment of the company to independence and the long-term relationships that fuel their success.
"The team at Fieldfisher have provided unbiased, well considered advice from the outset and have listened to, and incorporated, all of our concerns and requirements to structure the EO such that CDP can continue to build its reputation and success.
"We are now looking forward to the next phase of growth where we can take on even more challenging developments for our clients."
The report referred to above is available at The Ownership Dividend
For the latest news and views on employee ownership, follow Fieldfisher Partner Graeme Nuttall OBE on Twitter @nuttallreview.