Company becomes a partnership trust

SWITCH equipment specialist Herga, based in Bury St Edmunds, yesterday celebrated becoming a partnership trust company at a reception for employees and guests at Ickworth Hall - after the company's former owner and major shareholder Peter Tracey donated his stake to the business.

SWITCH equipment specialist Herga, based in Bury St Edmunds, yesterday celebrated becoming a partnership trust company at a reception for employees and guests at Ickworth Hall - after the company's former owner and major shareholder Peter Tracey donated his stake to the business.

By giving his shareholding to the new partnership trust, Mr Tracey said he hoped he had secured the long-term ownership of the company, safeguarding the jobs of its 150-plus employees in the process.

He said the partnership was the conclusion of two years studying possible exit strategies with Herga's managing director Richard Chatham.

Their main objectives, he said, were to avoid burdening the company with a high level of debt which would stifle its ability to develop, to create an organisation that would not be sold by a controlling minority, and to leave in place a structure that would attract and reward the best talent to take Herga forward into the future.

Mr Chatham said the partnership trust was “a fantastic conclusion” that unquestionably gave the company more security in terms of ownership.

“The other options were a management buy-out or to sell to a multi-national, both of which could have led to production being transferred elsewhere,” he said.

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“With an MBO, the investors usually want an exit in 5-10 years' time, so it really just postpones the decision to sell. A partnership trust secures ownership of the company in perpetuity.”

Mr Tracey, who became a joint owner of Herga in 1947 when it had six employees, said he was delighted to have formed the partnership trust.

“We have had a partnership culture for a long time so there's a great sense of trust in this business and that's why this is a natural move. We have created a team with a spirit of involvement and responsibility.”

Simon Fowler, customer services director of the John Lewis Partnership which had inspired Mr Tracey's decision, was the guest speaker at the celebrations and he encouraged Herga's employees to make the most of the opportunity they were being given.

In an emotional farewell speech, Mr Tracey paid tribute to the people he had helped develop over the years.

“Some of our leaders today started at the very bottom of the company and have, with our encouragement and support, gained university degrees on the way. Others have moved on, but they are all a credit to Herga.”

All management and staff who had been with Herga for more than one year were given shares in the company. Jenny Rogers, a supervisor who has worked at Herga for 28 years, said the partnership trust was “wonderful”.

“It gives us job security and means we're all in it together going forward.”