Kilmarnock IT specialist rebuffs takeover bids in favour of employee ownership

A Kilmarnock-based IT service specialist that supports NHS Scotland and a raft of blue-chip clients has opted for employee ownership rather than accept a multi-million-pound takeover offer that would uproot the business from Scotland.

Microtech Group founder and boss Chris McMail said he turned down such bids for the business, instead rewarding employees through an Employee Ownership Trust [EOT].

He had received “generous” offers from companies around the globe that were looking to relocate operations from Kilmarnock, but he had no intention of uprooting the business after more than 30 years in Scotland.

Microtech will now become a majority employee-owned company. With guidance from specialists at Ownership Associates, 74 per cent of the business’ shares will be transferred to an EOT, with Mr McMail keeping a minority shareholding and remaining MD.

Microtech is deepening its Scottish roots as it becomes a majority employee-owned company. Picture: Alan Watson.

The firm said it is worth around £15 million, achieved an annual turnover of £5m in 2021, and has 70 employees.

Mr McMail said: “This is a great business with talented, loyal people. My prime consideration was that any action taken would not compromise them in any way, nor disrupt the excellent service we deliver to our clients.

“After making the initial decision to explore options for the future, I received various competitive purchase offers. However, none of these guaranteed the continued operation of Microtech in Scotland, which took so much hard work to build.

'Any sale of the business to a third party would result in drastic changes... including potential relocation and possible job losses,' says MD Chris McMail. Picture: Robert D Campbell.

“It soon became apparent that any sale of the business to a third party would result in drastic changes to the company operations, including potential relocation and possible job losses.

“When the proposal of transitioning to an EOT was suggested, I knew this was the best way to secure the company’s position in Ayrshire.”

Microtech was established in 1986 as a professional IT support company, and said it has become one of the largest independent and market-leading IT support and healthcare companies in Scotland.

It added that it has developed an extensive customer and contracts base across the public and private sectors, including small and medium-sized enterprises and large corporates, with its focus telehealth and IT.

The group “prides itself” on providing a secure managed service to the NHS, which has been a client for more than 25 years.

Support

Paul Slater of V2 Corporate worked with Mr McMail on the exploration of options for the business, with David Deane of Bannatyne Kirkpatrick France providing legal support and accountancy and tax advice from John Fowlie of Robertson Craig.

Carole Leslie, founder of employee ownership specialists Ownership Associates, supported the transition project. She said: “This is a terrific win for Scottish business. Microtech provides an integral service to some of our most cherished institutions.

“The employees will now have reassurance that the company’s long-term future is secured. Not only does the EOT protect the jobs of the staff, but it will allow them to shape the future of this company.

“We are seeing more and more privately-owned businesses opting to go down the employee-ownership route. We anticipate that Microtech will serve as a standard bearer for future successes within this ownership model.”

It has been predicted that employees will become the owners of 30 more Scottish companies this year – double the number of deals completed in 2020. Firms to have made such a move include Camerons Strachan Yuill Architects.

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