Member News – Utility contractor Falco transitions to employee ownership
Utilities contractor, Falco Construction Limited has announced it is now employee-owned. The London-based company, established in 2004 by Brendan Griffin, has transitioned its ownership structure to an Employee Ownership Trust (EOT).
Many of Falco’s twenty-seven full-time staff have been with the firm throughout its rapid development and the transition to employee ownership was the logical next step in its development says the company’s founder, Brendan Griffin:
“The creation of an EOT enables us to preserve the legacy of the Falco brand and maintain its status as an established partner for utility providers well into the future,” he says, “This development safeguards the future of Falco for the benefit of its future leaders and employees and acknowledges their contribution to the company’s development and gives all employees an opportunity to share in its continued success, since by creating an ownership culture we can more effectively incentivise and accelerate growth.”
It will be very much business as usual for Falco’s customers and stakeholders who will see no change to its day-to-day operations with the same management and operational teams remaining in place. Customers will however enjoy the benefits that come from working with an engaged and aligned business with motivated staff.
As part of the move Brendan Griffin, who will sit on the EOT board and continue in his hands-on role as Managing Director, has arranged for Falco to join the Employee Ownership Association (EOA), a body which represents EOTs and which works closely with its members to champion, promote and provide insight into the business case for employee ownership.
Deb Oxley OBE, Chief Executive Officer of the EOA, said: “Congratulations to Falco and its new employee owners, we are delighted to welcome them as members of the EOA. By making this move as part of their succession plan, the business is securing its values, ethos and independence for the longer term, to the benefit of the employees, the business and the regional economy.”
An EOT is a special form of employee benefit trust introduced by the Government in September 2014 in an attempt to encourage more shareholders to set up a corporate structure which facilitates wider employee-ownership, albeit via an indirect holding company.
The EOT route is becoming an increasingly popular alternative to a trade sale or management buy-out. Employee ownership in the UK is growing, with more than 50% of growth in new EO businesses being since 2017. There was 28% growth in 2019, with 2020 growth increasing, according to the Employee Ownership Association (EOA).
A number of companies in the construction/civil engineering sectors such as Mott MacDonald, Arup, McGee and Black & Veatch have transitioned to EOT and are enjoying the business advantages of this ownership structure.
“By aligning the interests of the business and its employees Falco will benefit from greater staff engagement and commitment which can only strengthen the company’s performance which will hopefully provide the platform for continued long-term sustainable growth” continues Brendan.
Falco specialises in groundworks to facilitate the installation and maintenance of underground assets for the electrical, water and telecoms sectors. The company, which operates through London and the South East is a tier-one framework contract for UK Power Networks (UKPN) and Thames Water. It has recently been involved in a number of key infrastructure projects such as Crossrail, Thames Tideway and Battersea Power Station redevelopment as well as providing day-to-day programmes of installations, maintenance and repairs of utility infrastructure.