Imagitech, a Swansea-based software and app development company, has transitioned into employee ownership.
The company works with UK and international clients to develop training and revision aids, as well as management and assessment systems for driving theory tests and health and safety qualifications, alongside custom-built applications and software for other businesses too.
Founded by Mike Bews and Gerhard Manogg in 1995, it works with driving theory test companies in the UK, Ireland and South Africa, as well as with the Construction Industry Training Board here in the UK.
Now, the 17 members of staff who work for Imagitech will own the company thanks to its transition to an Employee Ownership Trust (EOT), which is an indirect form of Employee Ownership, where the shares are held collectively on behalf of employees via the EOT.
Founding director Mike Bews explained that he and his business partner Gerhard thought their company was too small for an EOT, but after exploring the trade sale option, looked again and saw that it was the perfect solution for them.
“Software and app development is a very fast-moving sector and as you get older you realise that you might be getting old hat, so as the business is on an upwards trajectory, we wanted to pass it on when we were on a high,” Mike said.
“When looking at a trade sale we could see that some companies were thinking of breaking the company up, however, or simply taking our contracts and stripping us out, and we didn’t want that as we have built this pool of talent within Imagitech and wanted it to remain in Swansea, and in Wales.”
Mike explained that the team at Imagitech are close-knit, with many having worked with them for many years, and so they were keen to look at an option where they could benefit from the sale.
Mike said: “The thought of the company being split up really didn’t sit well with us, so after initially dismissing an EOT as we thought we were too small, we looked at it again. Thanks to the help and support of the team at Cwmpas, we decided it was the right option for us and our colleagues, who will now have the opportunity to benefit from the hard work they put into Imagitech, their own business.”
With Mike and Gerhard staying on for the foreseeable future, the board of Imagitech Ltd (the trading company) comprises Gerhard Manogg as Commercial Director, alongside Mike Bews and James Clarke. Imagitech EOT Ltd board comprises of Gerhard Manogg, Lisa Piper who is the Business and HR Manager and the independent trustee Harri Lloyd-Davies, a partner at Bevan and Buckland LLP Accountants.
Imagitech was advised on its EO transition by Social Business Wales, which is delivered by Cwmpas. Sarah Owens, specialist EO Consultant for Social Business Wales, said: “Imagitech is such an exciting and interesting business that has carved out a niche in the training, testing and assessment market, and so it is great that these skills will remain in Wales thanks to Imagitech becoming employee owned via an EOT.
“Employee ownership fosters a collaborative and supportive culture and one that drives innovation, which is a natural fit with the culture at Imagitech. Employee ownership is not a last resort when selling a business but is a model for forward thinking business wanting to retain and recruit talent and grow their business.”
Imagitech was also advised on its transition to being employee-owned by Acuity Law, Natalie Jones, Legal Director and Azets, Katherine Broadhurst, Partner, Corporate Finance.
Natalie Jones of Acuity said “We were delighted to assist Mike and Gerhard with this transaction. Implementing an EOT structure builds a shared purpose and collaborative way of working for staff, encouraging retention and performance. By transferring ownership of this successful business to its employees via the EOT, Mike and Gerhard have significantly increased the likelihood that this business will grow and remain centered in Wales for the foreseeable future.”
Katherine Broadhurst, Partner of Azets said: “From the start of the process, Mike and Gerhard’s passion for the business and the team they have built, as well as their sustainable business strategy, was clear. An EOT is an ideal structure to enable them to achieve their desired financial outcomes whilst also continuing their culture and legacy, maintaining the skills in Wales.”
The Employee Ownership Wales service is part of the Social Business Wales programme delivered by Cwmpas. It is part of the Business Wales family and funded by Welsh Government and the European Regional Development Fund.
