“The day we announced it was one of the proudest moments of my career”
Getech (employee owned since 2022)
Specialism: Edtech
HQ: Ipswich
Staff: 85
Q&A with Chairman Guy Watts
What was the trigger for you becoming an employee-owned business?
As a trio of owners, with several decades of experience, we had been exploring our options of realising our asset for some time.
Over the preceding four or five years we did the dance with VCs and PE firms, all of whom were so mechanical. It was just numbers to them – no interest in the sector we were in or the culture of the company. It was just a pure financial process, so we very quickly decided to discontinue with any further discussions with those institutions.
Concurrently, we had also had been approached by a number of interested trade organisations. Getech has been around for a long time, and although a bit of a hybrid organisation we are financially very strong, we have a lot of great customers, great vendors, great staff and great experience and reputation in our chosen markets, so the level of interest although very flattering was also somewhat to be expected.
We had some incredibly detailed discussions and, although agreeing heads of terms on a couple of occasions, we never quite got the deal done, for a variety of reasons, most notably the question “what would happen to Getech and its staff after an acquisition”? Once you have been on the emotional rollercoaster of a potential sale, it is natural that your desire to “sell” increases significantly, and it was after one of those unsuccessful trade sale discussions our financial advisors suggested an EOT.
What was the most challenging aspect of becoming an EOT?
The fact that none of us knew what an EOT was.
Getting a true understanding of what an EOT was, how it might manifest itself for Getech, and what were the potential complications was mind boggling. How come we had never heard of it?
On paper, it seemed to present the perfect scenario: as owners we could realise our asset AND we can sell to the staff, who had been part of our success so they could continue the Getech journey. It took us a full six months of research, discussions and advice for us to have the confidence it was the right vehicle for Getech and its future.
Getting the valuation, funding and HMRC approval was also a lengthy process, but that is just what the process demands.
You’ve been an EOT since 2022. Has it had any impact on any of your KPIs, for instance staff retention?
Fundamentally, Getech as a business carries on exactly as we did before. As a company we make the same decisions and chase the same opportunities, so the day-to-day impact has been almost zero.
However, there is a real understanding from the staff that they will now all benefit from the company’s success, so we have very definitely seen an increase in levels of responsibility. I do not know that being part of an EOT would singularly be responsible for retaining staff, but it would certainly be one of the contributing factors.
What’s the biggest upside and downside of being an EOT?
There are so many positives.
The day we announced we were becoming an EOT and in reality, passing ownership over to “the staff” was one of the proudest moments of my career.
Over the years the staff have been fundamental in our success, so it is only right they stand to benefit from Getech’s success moving forward.
Another big upside has been the ability to plan our personal exit from the company. All three of us have different exit dates in mind and all three of us have reduced our days accordingly since the EOT, enabling us to acclimatise to withdrawal process.
Make no mistake: it’s tough handing over the decision-making responsibilities to the new SLT after 30 years of putting your heart and soul into the growth and progression of “your baby”. Coming to the realisation that you will no longer be the “ figurehead” is tough to get your mind around. A scheduled timeline helps you come to terms with that.
The new SLT also benefit from that acclimatisation process as well. They are growing in confidence and starting to understand that they are not necessarily standing on our toes. The progress we have made in that regard in 2.5 years is amazing.
I honestly cannot think of a downside, as of yet , other than what am I going to do once I fully exit?
Are you aware of any mistakes or pitfalls other EOTs have made or encountered?
We were told from day one not to make the decision based on tax reasons, which I didn’t quite understand in the early days – selling your asset without donating a big chunk to HMRC was always a key benefit.
But now I totally get it. All the other fundamentals need to be in place for that tax benefit to mean something .
The other crucial thing is that there has to be a natural successor and potential new SLT in position. Aside from the finance, having a successor in place is probably the most crucial factor – someone you can trust to be as dedicated resolute and focussed as you have been, who has or can build a team around them to take the company onto the next phase.
What message would you have for other MSPs or IT consultancies contemplating becoming an EOT?
Get some advice and if, the fundamentals are in place, then do it and do not look back.
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