ANN ARBOR, Mich.--(BUSINESS WIRE)--On January 1, 2017, Arbor Assays became the first employee-owned (EO) life sciences company through the use of a “perpetual trust.” The owners sold their interests to the employee trust and provided seller financing. This method of employee ownership maintains the company perpetually for the benefit of its employees. While a relatively new technique in the United States this arrangement is more common in Great Britain where “perpetual trusts” are widely recognized.
Founded in 2007 by Drs. Russell Hart, Nancy Schmidt and Barbara Scheuer, Arbor Assays is an Ann Arbor company that designs, develops, and manufactures detection and immunoassay products for important research biomolecules. Bobbi O’Hara, R&D Project Manager at Arbor Assays, led the employee group through the transaction as the Employee Representative. Russ, Barb and Bobbi are Directors of the Perpetual Trust that now owns the stock of Arbor Assays, Inc.
A number of law firms were involved in the transaction. Graeme Nuttall, at Fieldfisher in the UK, dealt with setting up the UK trust. Graeme has been intimately involved with drafting the UK government policy and laws governing Employee Ownership. The company used Bruce Elliott at Conlin, McKenney & Philbrick, and Christopher Moceri at Jaffe, Raitt, Heuer & Weiss for US legal work. Attorney Deborah Olson was hired by Arbor Assays to ensure that the company is run for the benefit of the employees.
Russell Hart commented: “We want Arbor Assays to remain an independent and successful business and were impressed by how the perpetual trust model can achieve this. Shares are held in trust permanently for all employees. This means there are no repurchase obligations that can destabilize a company's financial status. Profits normally distributed to investors instead go to employee bonuses. It has been shown in many cases that EO companies are more profitable, have higher employee retention rates, have happier work environments and survive longer than traditional companies.”
Bobbi O’Hara said: “Making the decision to transition from private ownership to perpetual trust speaks volumes about the faith in our collective competencies and the importance in taking care of each other, not just as coworkers, but as a community with a common goal. As employees, we are excited to see how we'll shape our shared responsibility and direct this opportunity to have an impact for the benefit of us all.”