New ESOP - 100 Year Old, 4th Generation Business
Select ESOP Experience

Majority family owned manufacturer of metal building products wished to exit over time via an ESOP transaction structure and the management team desired to increase their equity exposure in the company within and outside of the ESOP.  Transaction structure included equity raises from the management and employees through the 401(k) plan into the ESOP and a large equity raise from the family and management team via a purchased warrant equity structure.  Modest bank debt and a small tranche of mid-term seller notes rounded out the structure.  Post-transaction, the Company became essentially debt free within a few years with steller equity returns accruing to the ESOP participants and warrant investors.

2nd, 3rd and 4th generation majority famly owned manufacturing company with a large and diverse shareholder base transitioned full ownership to the ESOP.  Transaction structure provided a diverse shareholder group a menu of consideration options including cash, mid-term debt, long-term debt and purchased equity warrants for their shares.  This allowed shareholders to select a consideration package which attempted to maximize their personal goals with respect to their ownership and facilitated the successful completion of the transaction.  Significant ESOP considerations regarding benefit levels, post-transaction drop in value, and repurchase liability were navigated in the transaction process as well.

is a quote often attributed to Mark Twain and commonly heard in history classerooms across the country.  A similar statement can be made for ESOP transactions; each ESOP transaction is unique while sharing some similarities with past ESOP transactions.  

Peter of Es2 has over 15 years of ESOP structuring and implementation experience, experience we can quickly and effectively resource to help create the optimal, and unique, ESOP structure tailored exclusively for your company and its stakeholders.  A select sample of Peter's past transaction experience is presented below as a testament to our expertise.

Structured and implemented a 100% S-Corp. ESOP for a 4th generation owned construction company with over 100 years of business history.  Key structuring considerations included different tranches of seller financing tailored for the specific needs of the main owners.  Another key transaction benefit is a very long-term deferral of near-term deferred tax liabilities, generated from heavy equipment ownership, through the ESOP structure.

  • New ESOP Implementation
  • Partial ESOP to 100% ESOP Ownership
  • Unleveraged ESOP Formation
  • ESOP Termination

Partners and employees of an engineering and architecture effectively firm bought the firm "from themselves" via a 100% S-Corp. ESOP structure.  Retired and near retired partners received full to partial liquidity.  Other partners essentially transferred their ownership from a "taxable" holding (yearly pass through ownership income taxes) into the tax deferred ESOP structure via a 401(k) equity plan investment.  The 401(k) plan equity raise was broad based and realized high employee participation.  Straightforward ESOP transaction structure included modest bank debt and equity.

New ESOP - Management/Employee Buyout
Partial C-Corp. ESOP to 100% S-Corp. ESOP
Partial C-Corp. ESOP to 100% S-Corp. ESOP
New ESOP - Controlling Interest ESOP Purchase

Riverboat casino organization sold a 51% interest to its employees via an S-Corp. ESOP structure.  Structure allowed the ownership group to realize partial liquidity and diversification while maintaining a significant ownership stake in the business as well as providing ownership opportunity for long-term employees.  Additional structuring thoughts included belief that employee ownership structure would be viewed favorably by licensing and regulatory oversight structures.

Unleveraged ESOP Formation

Ownership of a laboratory testing company desired to test ESOP ownership in a cost effective manner.  Stucture included the corporate redemption of a minority interest block of stock from company ownership and the establishment of an ESOP plan with funding to consist mainly from the company's 401(k) matching contribution.  Design was for the company match to be made annually in shares of company stock, from the redeemed treasury stock,  with a value equal to the dollar value of the 401(k) match.  Given the S-Corporation structure, over time the shares contributed to the ESOP would receive their share of the company's tax distributions providing for an additional return to the ESOP.  Structure minimized implementation costs as an initial, transactional trustee team was not needed along with reduced corporate, implementation costs.

Management team of a commercial printing company desired to buy the company from a 2nd generation owner.  Structured and implemented a 100% S-Corp. ESOP buyout structure whereby the management team and employees purchased the business utilizing bank financing and equity from a 401(k) plan equity raise plus an additional equity investment by management in the form of warrants.  The management team and employees collectively had significantly more equity than in a traditional private equity buyout structure.  Post transaction the business rapidly deleveraged and has delivered superior equity returns over a long period of time.

New ESOP - Management/Employee Buyout
"History does not repeat but often rhymes"