Partnership Education shows employee-owned IT firms can still sell

Redsquid, a UK managed technology and cybersecurity provider, has bought Partnership Education, a Cranfield-based IT provider that supports more than 170 schools and academies. The deal brings nearly 80 employees and more than £8m of revenue into the group, and Redsquid calls it its largest acquisition to date. IT Channel Oxygen reported the deal on 16 April 2026, describing it as Redsquid’s second acquisition of the year after managed technology and cyber provider S3 in January.

The detail that matters is who said yes. Partnership Education’s majority shareholder was an employee ownership trust (EOT), which means its employees were shareholders in the business. Redsquid’s announcement says the deal followed an “overwhelming vote” by those employee owners in favor of joining the group.

Matt Perrett, managing director of Partnership Education, becomes Redsquid’s director of education and will lead its strategy for the sector. “Supporting the education sector has long been a key focus for us and Partnership Education brings exceptional people, expertise and shared values into the group,” said Sohin Raithatha, founder and chief executive of Redsquid.

For the channel, the signal is clear. Employee ownership can look like the exit that keeps a business independent for good. Partnership Education shows it need not be. An EOT changes who decides whether to sell, not whether a sale can happen. Acquisitive MSPs looking for specialists now have a pool of employee-owned targets, and at Partnership Education the buyer had to win a vote of employee owners rather than a founder.

The trust is not the end of the story

The economics of selling to a trust have also shifted. For disposals on or after 26 November 2025, half of a founder’s gain on a qualifying sale to an EOT is exempt from capital gains tax, where previously the whole gain was, according to HM Revenue & Customs (HMRC) guidance published on 6 April 2026. The relief can be withdrawn if the trust stops meeting the relief conditions in the four tax years after the year of the sale.

That has two consequences for channel M&A. Founders weighing an EOT now keep less of the tax advantage that made trusts attractive, so more of them may test the market first. And the helpsheet describes an EOT as a trust set up to hold a controlling interest in a trading company. On that reading, a sale out of a recently formed trust could put the selling founder’s relief at risk, so buyers approaching young trusts should expect hesitation. Redsquid’s announcement does not say when Partnership Education became employee-owned, and nothing in it suggests any withdrawal of relief arose in this deal.

The pool is not small. IT Channel Oxygen counts Partnership Education among several dozen UK channel partners to have become employee-owned. Each one is a business held for the benefit of its staff, who have a stake in any offer.

Specialists are what consolidators pay for

What Redsquid has bought is a customer base of schools and academies and the people who know how they buy. Schools buy technology in their own way, and that knowledge takes years to build. A generalist MSP can resell the same licenses and devices, but it cannot quickly acquire the trust of a multi-academy trust’s business manager.

Perrett makes the same point in his own terms. “Partnership Education has earned the trust of schools by being practical, responsive and deeply focused on what education leaders need both operationally and strategically,” he said. That reputation is the asset, and it walks out of the door if the staff do not want the deal. At Partnership Education, they also got to say so in a vote.

This is why the vote matters more than the price. A founder can be persuaded by a number. A workforce that owns the business will weigh jobs, roles, culture and what happens to customers. Redsquid’s answer was to keep the leadership in place in a group role and to stress shared values in its announcement. Other buyers will need an answer of their own.

Both sides should prepare now

Acquisitive MSPs should map the employee-owned specialists in the sectors they want to enter and treat the workforce as the buyer of their pitch. That means a clear plan for roles and service continuity, presented to people who are not used to being sold to.

Boards and trustees of employee-owned partners should decide in principle how they would handle an approach before one arrives, including how employees would be consulted. Working it out under a deadline serves nobody.

Founders considering a trust should model it against a trade sale under the new tax rules, not the old ones.

Employee ownership moves the exit decision from one desk to many.