Founded in 1870, Stewart Buchanan Gauges is based in Kilsyth and manufactures specialist valves and gauges. Employing over 150 people, the firm is recognized as one of the leading manufacturers in its market and exports to 50 countries.
Text of Stewart Buchanan Gauges
1. Founded in 1870, Stewart-Buchanan Gauges is based in Kilsyth andmanufactures specialist valves and gauges. The 42,000 square feet manufacturing plant features the latest state of the art 3D design, CNC machinery and manufacturing techniques. Employing over 160people, the firm is recognized as one of the leading manufacturers in its market and exports to 50 countries. Stewart-Buchanan Gauges 17871SE_CDS_CaseStudiesV3.indd 5 25/03/2014 13:08
2. Co-operative Development Scotland 27 Causeyside Street Paisley PA1 1UL www.cdscotland.co.uk Scottish Enterprise Atrium Court 50 Waterloo Street Glasgow G2 6HQ www.scottish-enterprise.comSE/3983/Mar14 Co-operative Development Scotland is the arm of Scottish Enterprise working in partnership with Highlands and Islands Enterprise that supports company growth through collaborative and employee ownership business models. For more information or advice on employee ownership, email firstname.lastname@example.org or call us on 0141 951 3055. Follow us on Twitter @cdscotland MAIN BUSINESS Design and manufacture of specialist valves and gauges ANNUAL TURNOVER 10.6m NUMBER OF EMPLOYEES 160 Stewart-Buchanan Gauges Ltd Burnside Ind Estate Kilsyth Glasgow Scotland G65 9JX Tel: +44 1236 821533 Fax: +44 1236 824090 www.stewarts-group.com Stephen Nicol, Managing Director, Stewart-Buchanan Gauges We have a good loyal workforce with virtually no staff turnover. Now the uncertainty of a potential future sale has been removed and we can all focus on making the business as successful as it can be, and enjoy the benefits of that success. THE CHALLENGE As Frank Phair, who had led the company for 42years, approached retirement, he considered his succession options. He had received several offers for the business, mainly from international firms. A trade sale would almost likely lead to a relocation of the business, and as 85% of the workforce live within 5 miles of the company, thiswas a route Frank did not want to take. Frank sought an exit route that would secure thefuture of the business in the local community and create a structure that would enable futuregrowth. THE SOLUTION With the support of Co-operative Development Scotland (CDS), he explored selling to the employees, and decided this was the best way forward. Stewart Buchanan Gauges moved into employee ownership in December 2011. DEAL STRUCTURE & OWNERSHIP The company opted to implement a hybrid ownership model combining trust and individual shareholding. Frank sold his shares to an Employee Benefit Trust (EBT), taking the payment for this over a 10-year period. This suited Frank and his family, and meant that the company was not burdened with debt in the initial years. A Share Incentive Plan (SIP) was introduced and 97% of employees participate inthe plan. GOVERNANCE & EMPLOYEE ENGAGEMENT Frank Phair took on the role of chair following the deal, Stephen Nicol, formerly Operations Director, became Managing Director. The family has retained seats on the board until the funding period concludes. THE IMPACT Turnover has grown 43% since the buyout and the share price has increased well beyond the level of other investment alternatives. 17871SE_CDS_CaseStudiesV3.indd 6 25/03/2014 13:08