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Macdonald Henderson Advises on Employee Buyout of  The Electric Heating Company - 27th April 2020 - Click for larger version Macdonald Henderson Advises on Employee Buyout of The Electric Heating Company - 27th April 2020

Macdonald Henderson are delighted to have advised EHC Energy Limited, the distributor of electric heating and hot water products, on the employee buyout of the company from existing shareholders/directors, Bill Walters and David Stevenson, securing a majority stake for the group’s employees.

The transaction was supported by acquisition finance (term loan) from Clydesdale Bank.

The group’s trading subsidiary, Electric Heating Company Limited, began trading in 2005. Turnover reached £3.75 million in the year ended 31 October 2019, a 14% rise on 2018.

Customers include various social and private landlords throughout the UK, all the major UK plumbing and electrical wholesalers and a host of independent wholesalers.

The last 3 years has seen a move towards electric heating as insulation has improved in properties nationwide.

In addition, the increase in the generation of electricity from renewable sources has dramatically increased.

Government policy moving towards an electric grid and prohibiting gas products in new build properties from 2025 make the electric heating market an attractive one.

Over the past 18 months the directors have gone through the process of devolving the day to day running of the business to existing managers and staff and developed a growth strategy for the next two years.

About the transaction, Mr Bill Walters Managing Director commented:

“The Directors of EHC have actively been looking for a suitable exit strategy for a number of years that would provide a solution which safeguards all parties concerned. Various schemes were promoted to us however we operate a transparent management style and when we discussed the options with the key staff it was agreed the employee share scheme would deliver the best long term solution to meet our future aspirations. We are delighted that the transaction is now complete and provides stability across the company in these challenging times”.

About the role of Macdonald Henderson, Mr Walters commented:

“Following initial detailed discussions with Fraser Morrison we appointed Macdonald Henderson to complete the complex transaction on the Directors behalf. The advice and support we received from them throughout the process has been outstanding. Given the difficulties of the current situation they made great effort to ensure that we received regular updates and successfully completed the transaction on the agreed timescale. We are extremely grateful to both David Beveridge and Colm Kerr for all their efforts”

Macdonald Henderson (David Beveridge and Colm Kerr) acted for the shareholder/directors, Ness Gallagher for the employees, Harper Macleod for Clydesdale Bank, with WDM CA providing accountancy, tax and corporate finance advices.

Last updated: 1.18pm, Sunday 26th April 2020

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