"ADAMSVILLE, PA — Signature Vacuum Furnaces, a company that originated in a breakfast meeting between two friends and co-founders, with the first order prosecuted in one partner's kitchen and the second partner's basement, is now partially owned by its employees through a structure new to the US called an Employee Ownership Trust, or EOT.
"We explored a couple of avenues with some folks that were interested in buying the company," said Greg Kimble, one of two co-founders. "But ultimately, we wanted to continue our legacy and keep our team employed here. We've developed a real family-like environment here over the years, and we care about our people and their wellbeing."
"Employee-owned businesses have a much greater capability to retain their existing culture than those that sell externally," Kevin McPhillips, Executive Director of the Pennsylvania Center of Employee Ownership (PaCEO) said. "Signature's owners understand the value of that."
Greg Kimble and co-founder Tim Horning first met in 1978, and it didn't take long for them to agree that, should the opportunity arise, they would love to work together. A couple decades later, their dream came to fruition. Signature Vacuum Systems was incorporated in June of 2002, and they took their first order in November of the same year.
Now, Signature has 15 employees and the furnaces they've manufactured are installed internationally as far away as Japan.
"We chose the EOT structure for a couple different reasons," Heather Bell, Operations Manager at Signature said. "We liked the ease of structure of an EOT, as well as being able to modify aspects as necessary down the road. We're also a smaller company, and the cost of an EOT was much more feasible for our size and revenue."
An Employee Ownership Trust, or EOT, is a form of employee ownership that is new to the United States, but common in the United Kingdom. Under an EOT structure, the owner creates a trust that will hold some or all of the business; the purposes of the trust are often to benefit the community and employees, and preserve legacy. The company then makes a contribution of cash to the trust, which in turn buys shares from the current owner. In the majority of transactions, the owner offers seller financing.
Signature now joins the roughly 40 other companies nationally that have Employee Ownership Trusts.
To make the transition, Signature worked with Common Trust, an organization that assists owners exploring and transitioning to EOTs.
"Working with Common Trust was essential to the transition process," Bell said. "We wouldn't have been able to do this without the help from them and from Jeff Parnell."
"Study after study confirms that employee-owned companies typically outperform their non-employee-owned peers, and with Signature's dedicated employee base, I'm excited to see how this translates," Jeff Parnell, Founder and CEO of JHP Advisors said.
The Strategic Early Warning Network (SEWN) also played an important part in enabling the transaction.
"Signature Vacuum's decision to embrace employee ownership is perfectly aligned with our mission," Michael Perfetti, Western Regional Director for SEWN noted.
"I'm greatly looking forward to higher engagement from all of our employees," Bell said. "They have so much to offer and valuable suggestions to give, but they didn't always have an avenue in the past to make them heard as easily."
"I would suggest it to other business owners," Kimble concluded. "I think it's a great option to have."
"It's well worth it," Bell agreed. "We feel that we've paved the way for the future of both the company and our employees."