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LEARNING IT BECOMES EMPLOYEE OWNED - Press Release

Learning IT, Scotland's largest independently owned IT training business, has concluded a deal with Baxi Partnership Ltd, the £20m (€28m) Trust owned investment company for employee ownership, under which Learning IT has become an employee owned business.

Under the terms of the deal, Baxi Partnership Ltd has purchased 50% of the company's shares which will be held on behalf of the employees themselves. The other 50% is held individually or collectively by all Learning IT employees. The investment from Baxi is on a staged basis and the completion of the deal over a period of time will see Learning IT as an employee owned business valued at around £2m (€2.8m).

There will be no change in the day-to-day operational management of the company, which will continue to be headed up by the co-founders, Duncan Macleod and Allan Hunter. Two new employee directors will be elected to the board with Baxi Partnership nominated non-executive director, Don Munro, managing director of employee owned Tullis Russell the Papermakers.

The agreement will see some shares being issued free to employees immediately under a Share Incentive Plan (SIP) arrangement, which the Government introduced to encourage employee share ownership, particularly amongst smaller companies. The agreement will also enable Learning IT employees to buy and sell shares internally, while receiving share bonuses in every profitable year.

The move is the next stage in Learning IT's expansion strategy which has seen the company grow from a 500 square foot office six years ago, to two modern offices and training facilities in Stirling and Glasgow and a turnover in excess of £4 million.

Announcing the deal, Learning IT's managing director, Duncan Macleod, said: "This is a fantastic development for our company and our staff. We believe that the success we have had to date is down to the quality and loyalty of the people who work here and this agreement with Baxi Partnership provides an ideal vehicle for Learning IT to be employee owned and run.

"We have a strong commitment to employee involvement and, in a smallish company like ours, individuals really can make a huge difference to how well the company performs. The agreement will also provide funding to help us develop the business for profitable growth. Our aim is to remain profitable and increase turnover by 20% within the next two years."

Learning IT's core business is in providing high level technical training and office applications training to Scotland's blue chip companies and public sector organisations, and its accreditations include being Scotland's only Cisco Learning Partner and a Microsoft Certified Technical Education Centre. But Learning IT is unique in Scotland in that it also provides training for unemployed people, modern apprenticeship programmes and bespoke e-learning packages. The Company also now runs a recruitment and resourcing division, People IT, which offers a unique combination of resourcing and ongoing training to its customers.

Baxi Partnership Ltd is owned by a Trust with its own Act of Parliament. Its purpose is to help companies convert to full employee ownership through funding leveraged all employee buyouts. The Trust was created by Philip Baxendale and based on the former Baxi Boiler Company.

Commenting on Baxi Partnership's funding role, executive director David Erdal, said:
"The appetite for all employee ownership is growing in the UK and with Learning IT part of our group of companies we will have brought over 400 people into employee ownership from four businesses in twelve months. Now that they're the owners of the business I know they'll be even more inspirational trainers for their customers."

Scottish Enterprise helped fund an earlier stage in the company's development through the Business Growth Fund and worked closely with the company in the lead up to signing the deal with Baxi.

Charlene O'Connor, chief executive of SE Forth Valley, said: " We have worked closely with Learning IT since it was established; providing support to help it grow and expand, more recently assisting the company to secure the deal with Baxi.

"We are delighted at the company's success. Learning IT has become an important asset in the Forth Valley business community and the fact that they have built a great business from their initial start up in Stirling demonstrates that you don't have to launch your company in one of Scotland's major cities to become a player."

Everyone at Learning IT is very optimistic about the company's future as an employee-owned business. Nina Boyd, who joined the company in its early stages, comments: "Our directors and staff are 100% motivated to see Learning IT succeed, and we think that's why we have continued to grow in spite of the recession. Our vision for the future is as a business which is owned by all of us and which does a great job for our customers. We will continue to remain focused primarily on Scotland but we also want to expand further afield. We're very excited about the future."

About Baxi Partnership

Baxi Partnership has brought over 400 people into employee ownership in the last twelve months. In addition to investing in Learning IT, Baxi partnership has supported the leveraged all employee buyout of the world renowned Loch Fyne Oyster Company, invested in North East of Scotland specialist engineering company, Woollard and Henry and in Lancashire Tank Container maker UBHI International.

Baxi Partnership executive director David Erdal brought his family business Tullis Russell the Papermakers into all employee ownership in 1994 since when productivity at the main papermaking mill has quadrupled and higher margin paper converting businesses, including a business in Korea have been added. He stepped down as chairman in 1996 and remains a non-executive director of the company.

Baxi Partnership is governed by its own Act of Parliament - The Baxi Partnership Limited Trust Act 2000. It places a duty on Trustees that they must use the trust fund to benefit the employees of the Baxi Partnership Group and its member companies.