Highlands TEFL firm moves into employee ownership

TEFL Org, a provider of TEFL (teaching English as a foreign language) accreditations based in the Scottish Highlands, has become employee-owned.

Highlands TEFL firm moves into employee ownership

Jennifer Mackenzie & Joe Hallwood

Launched from a garden shed in the middle of the 2008 financial crash by founders Joe Hallwood and Jennifer MacKenzie, the TEFL Org is established as a market leader, with more qualifications secured than any other provider.

Since its inception, the TEFL Org, which provides in-person and online courses, has grown year on year. In the last financial year alone, the company witnessed an 81% growth, increasing revenue from £2.4m in 2019 to £4.8m in 2020.

Currently based in the Scottish Highlands, it now employs more than 30 employees from over 5 different countries, including 17 core staff, 11 of whom are local to the office.

Joe Hallwood, co-founder of the Inverness firm, has attributed the move to providing job security for staff, and also ensuring the company maintains its pioneering standards for years to come.

He said: “Jennifer and I have built the brand from the ground up. We’re very proud of it and want to ensure it continues thriving as we look towards retirement.

“We are the highest calibre TEFL provider in the world, both in terms of operations and the way we treat our staff. If we were to sell to a competitor, we risk losing our hard-won reputation.

“Some of our employees have been with us since the first few months and know the company inside out. We trust them to do right by the firm and have no doubt it will continue to thrive under their care.”

The Employee Ownership Trust allows for a buyout over time, giving everyone time to adjust before the company becomes fully employee owned.

While the pandemic resulted in a cessation of in-person learning, the TEFL Org’s virtual classroom courses and on-demand online courses have grown in popularity, by more than 250% over the last year.

Co-founder Jennifer Mackenzie added: “As much as possible, we will be pursuing the remote learning route. It has proven to be much more efficient than in-person teaching and provides flexibility for our staff and our learners.

“For example, someone from Thailand can be in the same virtual classroom as someone from Shetland, both being taught by a teacher from Madrid.

“However, as much as we wish to pursue more remote options – we would never want the company to become entirely online.

“Due to the relative remoteness of our head office, if we sold the TEFL Org, we recognised there would be a high chance the buyer would move the company elsewhere. We wanted to provide job security for our core team who are local to our headquarters.”

Joe and Jennifer were introduced to the employee ownership model by Azets UK accountants and also Scottish law firm Ledingham Chalmers, which helped advise on the move.

Graham Cunning, partner and head of corporate finance with Azets, commented: Employee Ownership Trusts are rising in popularity at the expense of the more traditional trade sale as they offer owners more privacy and greater control of the sale process.

“For a people business like the TEFL Org with a great culture that Jennifer and Joe have developed over the years, an EOT is an ideal solution.

“We are currently advising clients on a much greater number of prospective EOT deals and wish the employee owners of the TEFL Org every success as they continue to build their business.”

Andrew Stott, senior associate with Ledingham Chalmers, said: “This deal is a great example of why employee ownership models are something of a win-win for sellers and buyers.

“The seller achieves the exit it wants and maintains its legacy. Meanwhile, through this model, employees have a great platform for growth and a bigger stake in ensuring the organisation’s prosperity. Plus, there are tax benefits for both parties and it is largely business as usual for customers and suppliers.

“I expect we’ll see deals of this kind grow in popularity not least for the reasons I’ve mentioned but also because they’re less likely to involve the adversity you sometimes find in trade sales so can often be a smoother and more collaborative deal.”

To ensure a smooth transition, Joe and Jennifer worked with Ownership Associates, a specialist consultancy that guides firms into employee ownership. Carole Leslie, its founder, was appointed by both as the independent Trustee for the Trust.

Carole Leslie added: “The TEFL Org is very much a quality provider and preserving that reputation is one of the key drivers behind the move to employee ownership, as is protection of its loyal employee group.

“As awareness and understanding of employee ownership grows in Scotland, it is great that business owners are seeing the merits of entrusting succession to those that have helped them create their successful enterprises in the first place.”

Jennifer added: “Carole supported us from the get go. It’s been such a weight off having someone that really understands employee ownership there to support us.

“The most terrifying thing was telling the staff because we weren’t sure how they would react, but thanks to Carole helping us prepare properly, everything was fine.

“She made up a detailed document for everyone to read, explaining employee ownership and what it meant for us and was also on hand to answer any questions. It made everyone feel incredibly reassured.”

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