Didn’t see this posted here yet. Roy Gandy recently converted his ownership into a trust.
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Yes, it’s a great business model if you don’t need a cash injection.
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It’s a shame Naim didn’t follow a similar path, imho.
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indeed. Linn and Naim
IHT may also play a role in businesses that are individually owned. It could be to avoid Rega going bust on his death.
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They obviously don’t at the moment and it wouldn’t necessarily preclude them from future external investment.
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Call me cynical (I am), but it probably has more than a little to do with changes to Captial Gains Tax relief that came into effect on 30 October:
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Very classy. Respect to the owner.
That is a cynical view. The changes don’t amount to much, tweaking around the edges.
It would be more effective to buy a few farms and…oh…hang on…
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Doubt it. I often take a cynical view as well but I genuinely think Rega and Roy Gandy do things differently. My opinion has been reinforced by speaking to several people who know him over the years.
If I remember correctly Richer Sounds did a similar thing a few years back.
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The ultimate parent company of a business I work with rushed just such a change through before the end of October to beat the changes, netting the two major shareholders something like £75 with no corporation tax to pay, so it’s quite possible the same happened in this instance (Rega is obviously a much smaller company than this example).
Either way to me it seems a good way to take the company forward when Roy Gandy retires and will allow it to stay true to its founding principles. If this can be done in a tax efficient way then fair enough.
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Hardly worth it for £75 each…
I wonder how Mr Gandy will blow his £30?
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“Becoming EOT prevents the company being sold and potential buyouts by the dreaded investors”
Didn’t Naim and Julian Vereker create a trust too? They sold the trust to investors?
At the time of his death, Julian Vereker held half of the share capital of the company. The other half was in the hands of employees, including Paul Stephenson who owned 20 percent. Vereker bequeathed his shares to be held in a trust of which Stephenson is trustee.[10]
Paul Stephenson “left” naim year after Vervent got in.
Paul S.
Okay. Let’s sort this. The truth is that Focal & Co bought 100% of Naim shares. And the way this deal has been managed is that, as part of them acquiring those shares, almost half of all the Naim shares that they acquired were turned into Focal shares, so myself, the Trust, etc., anybody who was a shareholder of Naim, becomes a shareholder of Focal & Co. So I am now a director of Focal and I sit on their board, but I am also personally a shareholder of Focal & Co. that owns Focal/JMlab and Naim. But you asked what’s in it for them? Well, some of Naim’s strength comes from the success that we have had in Europe particularly, and we’ve got a good understanding of how that has happened. Part of my job, sitting on the Focal board, is to pass on some of the experience of our success into how we can help to influence the Focal brand to get stronger and have more market share.
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The way I read this is that on Julian Vereker’s death his Naim shares weren’t transferred into a EOT but most likely a discretionary trust with Julian’s dependents etc as beneficiaries and Paul Stephenson as trustee along with a trustee corporation. For reasons mentioned in the article I guess the senior management team decided it was the right thing to do to sell their shares to Focal and Paul along with the trustee corp also felt it was in the trust beneficiaries best interests from a investment perspective.
I didn’t see any mention of an EOT (it doesn’t look like they were introduced until 2014 and Julian died in 2000) so different scenario. Anyway am not an expert in this area and am sure others will correct me…
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IIRC it was a family trust was as they weren’t really interested in getting involved in the business. Eventually selling Naim enabled them to cash out and also for Naim to get more cash in for lots of development of things like DR and Statement.
I have long wondered what would happen to Rega when Gandy passed. Companies built around one sole strong owner, face many challenges when the owner dies.
It would be a shame to lose Rega.
I am reminded of Thiel (speakers). When the owner Jim Thiel died, the company went out of business a few years later. Sad really. I believe Ayre acoustics also faced problems when their owner Charles Hansen died.
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Thiel is a great example. Owned a pair of CS2 2’s a while back before I really fell down the wormhole and enjoyed them very much in my system then. I think a former employee and Jim’s brother still tinker with service and updates, but obviously not the same thing as an ongoing concern. Many small, great brands in the hifi space are highly dependent on the founder, and to an extent, it’s what makes this industry/hobby particularly interesting.
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Pity that ARA didn’t do the same with SME
You mean it’s a good thing or bad thing ?