A Business Exit via Employee Ownership Trust: Building Legacy, Not Just Value

Every business exit is different, and the right one takes planning. Here’s how we helped a pair of founders transition their business through an Employee Ownership Trust and build a post-exit life plan to match. 

The Business

This business was a global leader in recruitment. They placed senior staff and teams into many of the world’s top businesses and have helped launch offices in London and across the world. 

The Challenge:

At first, the natural route seemed to be an acquisition. 

The founders were confident in the strength of the business and open to offers. However, after a few failed attempts to sell to external buyers it made them more open to exploring alternative options for an exit.  

Founders often worry about what happens to the people and culture they’ve built. A traditional trade sale or private equity exit can mean: 

• Losing control of the company’s future values or direction. 

• Staff redundancies or major restructuring. 

• A legacy that’s diluted or dismantled over time. 

These founders wanted to create a lasting legacy while ensuring that with the sale of their business they would be able to unlock its worth and receive a fair value – not just be stuck with a huge tax liability. 

Through understanding the business structure and its potential, clients’ needs, and objectives, First Wealth Private Office was able to guide them on an approach that was right for both the founder’s situation and the business.  

Our Approach

Timing can sometimes be a challenge – many founders don’t start thinking about exit until they are already close to wanting out. Fortunately, they had already started working with First Wealth several years earlier. That forward planning meant we had the runway needed to explore other options with confidence.  

After working together for five years to build their broader financial plan, growing wealth outside the business, and strengthening their financial independence, we shifted focus toward a new option: an Employee Ownership Trust (EOT). 

How it worked

• The founders sold their shares to an Employee Ownership Trust that would eventually transfer ownership to the employees. 

• Instead of receiving a lump sum upfront (as in a trade sale), the founders will be paid out over 5–10 years from future company profits. 

• Crucially, under current legislation, the entire sale was tax-free. 

But it wasn’t just about the structure; it was about the planning

• First Wealth Private Office maximised pension contributions and built tax-efficient investments outside the business. 

• We created a financial cushion, so the founders didn’t feel forced to take the first offer or sell at a discount. 

• We helped prepare the next generation of management to take on leadership and keep the business thriving. 

• We advised on protection – specifically Keyperson insurance – required to help protect the sale against any curveballs. 

Guiding the journey

Our job wasn’t to structure the EOT transaction directly, it was to guide the founders through the process and introduce them to trusted experts who could deliver on the technical elements. We brought in corporate finance specialists, legal counsel, and tax advisers with deep EOT experience, coordinating the team, ensuring the technical detail was covered by the right people, and keeping the founder’s goals front and centre. 

While others focused on the deal, our role was looking beyond it. We helped the founders understand what life would look like after the sale, designing a personal cashflow and investment strategy that matched their new reality. This included how to phase income from the EOT, manage their money tax efficiently, and ensure liquidity for day-to-day needs. We also advised on the Inheritance Tax implications of the sale – what was once an exempt asset for the founders now gave rise to a potentially significant tax bill for their family.  

We also introduced partners from our wider network to support their broader lifestyle needs, from private banking, general insurance and FX needs.  It’s never just about the exit, it’s about helping founders transition to a new phase and to live well after.  

Finding the best fit

Employee Ownership Trusts (EOTs) have grown in popularity over the last five to seven years, offering business owners an attractive combination of purpose and practicality. Structurally, they’re not for everyone but for the right business, they offer a compelling way to reward your people, preserve your culture, and still get fair value. 

In this case, our job was to make sure the founders had full visibility of the path ahead. We worked to model different scenarios: how much the business could generate in profits each year, what a fair HMRC-approved valuation would look like, and how long it would take to pay out the full amount. 

 That level of financial clarity and a genuine understanding of what the proceeds would mean to them gave the founders the confidence to proceed. 

The Outcome

The founders exited the business on their own terms, financially independent, emotionally at peace, and proud of the legacy they had left behind. 

The leadership team gained a meaningful opportunity to shape the next chapter. And the employees became empowered stewards of a business they helped build. 

Yes, the final sale value was slightly less than an acquisition deal might have offered, but the value created, financially and culturally, was far greater.  Sometimes having no tax liability in the long run can make it a more lucrative deal. 

It’s worth noting that the founders didn’t just “leave and let go.” They stayed involved for a transition period, mentoring the new leadership team and helping embed the EOT culture. This continuity helped maintain client trust and ensured a smoother handover. 

Why it Matters

Selling a business is never just a financial decision. It’s personal. It’s emotional. And it’s about what comes next. 

At First Wealth Private Office, we help business owners design exits that make sense for their future and their legacy. 

If you’re a founder thinking about your next move, whether it’s five months or five years away, now’s the time to start planning. The earlier you start, the more options you’ll have. If you’re thinking about exiting your business or just want to explore what options you have, let’s start the conversation. You can reach us on 020 7467 2700 or at privateoffice@firstwealth.co.uk

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.