Landmark EOT Deal Proves A Healthy Option For Grape Tree

A leading organic health foods retailer is targeting over £100m in revenue after it completed one of the largest Employee Ownership Trust (EOT) deals seen in the UK.

Grape Tree, which currently boasts 190 stores across England, Wales and Scotland, has sold a majority stake in its business to its 955-strong workforce, preserving the company’s culture and values, whilst providing long-term stability for its staff.

CEO and founder Nick Shutts believes the transaction is an integral part of the firm’s succession planning and gives it the momentum to open another 20 stores this year and continue its investment in bringing the highest quality wellness foods to the public.

Supported by professional services group DJH’s specialist EOT team, the business is expected to create a further 150 jobs as part of the expansion, both at new shops and at its headquarters and specialist packaging operations in Kingswinford.

“Grape Tree has come a long way since we started out in 2012, with the vision of creating a truly independent health foods retailer that always puts its customer first,” explained Nick, who had sold his first business Julian Graves to Holland & Barrett just a few years earlier.

“This has been an approach that has helped us gain significant market share and we wanted to build on this by making sure our employees continue to be the heartbeat of our business. There was also a big piece of work around succession planning.”

He continued: “Working with our long-term accountants DJH, we explored a variety of options that would negate the need for outside investment and eventually settled on the Employee Ownership Trust.

“This allows staff to take a share in the business without personal investment and, hopefully, sends out a clear message to our loyal customers that our original ethos is as strong as ever.”

DJH’s EOT team provided a turnkey solution to the Grape Tree management team, working alongside Nick and son Oliver from initial discussions, through to the completion of the transaction in just eight months.

This included a company valuation report, development of various share options and a full cashflow planning exercise. Extensive tax advice was given throughout, whilst internal communications was also supported on completion of the deal.

“The EOT was completely new to us all, and I can’t recommend highly enough the team at DJH,” added Oliver.

“Every question we had was answered quickly and efficiently, with Connor Smith and his team’s experience of these types of transactions ensuring we met all the timelines we set. The latter was extremely important, as we didn’t want to neglect our growth plans whilst this was going through.”

DJH Halesowen has been providing expert financial and accountancy services in the Black Country for more than 90 years.

The company has enjoyed a decade-long partnership delivering auditing and business advice to Grape Tree and, importantly, was able to bring in Employee Ownership Trust experts from its sister office in Manchester to guide the deal.

Mark Howell, Director at DJH Halesowen, continued:

“Becoming part of DJH last year gives us access to lots of specialist knowledge and we were delighted to be able to introduce Connor to Nick and Oliver."

“The trust and history were already in place, and this certainly helped speed up the transaction as we could keep a lot of the complex negotiations in house, leading to a successful outcome for Grape Tree.”

He concluded: “This will arguably be the biggest of the 30 EOTs we have advised on to date. We’re delighted to have played a role in helping one of the UK’s fastest growing retailers write the next chapter in its history - with its employees a focal part of the story.”

As part of the new structure, Grape Tree has appointed Campbell McDonald as Chair of its EOT Board.

Top Photo: (l-r) Oliver and Nick Shutts (both Grape Tree) with Mark Howell of DJH Halesowen