HURST advises on employee ownership move for fast-growing Instinct Resourcing
A specialist recruitment company has become an employee-owned business as it heads for another record year, with turnover on track to top £11m.
Instinct Resourcing was founded in 2011 by Mike Ward and Matt Owens and has 18 staff.
The Manchester-based company achieved revenues of £9.6m in 2022, its sixth consecutive year of growth. It has doubled turnover since 2019 and is experiencing further strong progress this year, with revenues on track to rise to £11.5m.
A team at HURST advised Instinct’s shareholders on the transition to employee ownership.
Instinct recruits for temporary and permanent digital learning and learning technology roles across the public and private sectors, including strategists, content creators, content developers and administrators.
It has a strong presence in the education sector, supplying specialists to universities, colleges, business schools and other institutions which offer blended tuition programmes.
In the commercial sector, Instinct recruits for companies across the UK, Europe and the United States which offer a host of e-learning programmes, on topics ranging from product launches to compliance and risk.
Its commercial client base spans sectors including oil and gas, financial and professional services, retailing, automotive, defence, technology and food manufacturing.
Mike and Matt said they received several approaches for the business and considered a range of options, including a trade sale and private equity investment, before choosing to transfer ownership of Instinct to an employee ownership trust to safeguard the futures of its team.
The HURST team comprised partner Liz Gallagher, who heads our tax advisory team, associate tax manager Sam Ryan and corporate finance partner Ben Bradley.
Liz said: “Since its inception, Mike and Matt have steadily grown Instinct into one of the most successful specialist recruitment businesses in the north west.
“This success has been in large part due to the quality of the dedicated people employed in the business. This is why Mike and Matt decided on the employee ownership route – to add stability and ensure that Instinct would continue to thrive and prosper with the business now in the hands of the staff.”
Instinct has seen rapid growth over the past few years. During the Covid pandemic, educational institutions shifted to online tuition, triggering soaring demand for e-learning specialists.
As the pandemic receded, demand from the commercial sector surged as businesses revived plans which had been put on hold, rebuilt their teams following Covid redundancy programmes, and sought to fill vacancies left by people retiring or changing careers during the crisis.
Mike said these factors, along with the evolving maturity of the company, had enabled Instinct to achieve sustained growth.
“We are proud of having an excellent staff retention rate as well as our ability to attract high-calibre professionals. The team’s knowledge, their ability to win new business and to develop existing client relationships have been key to driving our growth,” he said.
“When Matt and I were looking at our options, we had dozens of approaches but none felt right except the employee ownership route.
“Our team have shown us a huge amount of loyalty over the years – without them, we would not have been able to grow the business to such an extent. The last thing we wanted to do was to sell the business and put their futures in jeopardy.
“In addition, we had no wish to retire. The employee ownership trust option appealed to us on all levels – to realise value and secure the future of our employees and build financial security for them and their families.
“It is very firmly business as usual for Instinct. We will all go on the journey together and we are very excited to see what the future holds.”
Mike added: “HURST were brilliant throughout the process, from both a tax and corporate finance perspective, showing great professionalism and keeping us constantly updated. The advice we received from Liz and the team was impeccable, and ensured a smooth transition.”
Paul Johnson and Hollie Walsh, of law firm Ward Hadaway, provided legal advice to the shareholders. Ian Riggs, national head of corporate at law firm Hill Dickinson, advised the newly-created employee ownership trust.