Jigsaw Day Nursery is a children’s day nursery and out of school care club. It was established in 1989, in Coventry Holbrooks, Coventry by a partnership of two women. In 1991 one of the partners wanted to release her capital from the business. Jigsaw is now a successful employee owned business. This case study identifies how it was achieved.
The owner approached Coventry and Warwickshire CDA to explore the option of an employee buyout. The owner wanted an exit route for herself and her money, but also wanted to safeguard the jobs. The solution was to register a co-operative business to provide a buyout vehicle.
Coventry and Warwickshire CDA undertook a confidential feasibility study which revealed that an employee buyout was possible. The CDA was then invited to make a presentation to the workforce who were enthusiastic about the prospect of taking over the business. Coventry and Warwickshire CDA negotiated with the owners on the price and terms of the handover.
The employees undertook a programme of business skills training from Coventry and Warwickshire CDA to enable them to fulfil the additional duties of running limited company.
The raising of the finance
The CDA were able to secure a grant for the buyout from Coventry City Council’s Urban Programme block grant scheme for workplace and community nurseries. The grant paid for the assets purchased from the old nursery and enabled some important refurbishment to take place. Coventry and Warwickshire CDA also secured loans on favourable terms from West Midlands Co-operative Finance and Industrial Common Ownership Finance.
After the conversion
In August 1992 the employees took over Jigsaw Day Nursery. Jigsaw Co-operative Limited is a company limited by guarantee with all assets held in common.
Since the buyout the nursery industry in Coventry has gone through a difficult patch due to the large numbers of redundancies from local factories. Jigsaw s employee owned structure has helped to hold them together through this difficult time and encouraged everyone to get involved in marketing activity. Jigsaw s fortunes have now improved and they have also opened an out of school activity club with help from the local Training and Enterprise Council.