NATIONAL FREIGHT CONSORTIUM: AN EMPLOYEE BUYOUT
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• NEC was one of the earliest 'privatisation' buyouts and at the time — early 1982 — it was the largest buyout ever attempted in the UK. It was a considerable achievement, not merely because of its size, but because arrangements were made to include all the managers, staff and pensioners — no less than 10,000 of whom eventually participated. The employee group ended up with an 82.5% interest in the equity, but most of the purchase consideration of some £53.5 million came from a loan and equity package from a consortium of banks.
NEC is a good example of how the fortunes of a bought out company can move into overdrive after the buyout has been completed. According to the 'fair value' established on a regular basis by a firm of accountants to enable transfers to take place, the shares originally subscribed for at £1 each are now worth some £42. If the company was floated, they would clearly be worth considerably more than that, but the directors, supported by a majority of the employees, have decided not to seek a quotation yet.