ESOP Formations
Employee Stock Ownership Plans (“ESOPs”), tax-qualified retirement plans that invest primarily in the sponsoring company’s stock, offer a range of benefits to the owners of closely held companies and to their employees. GBQ Capital understands the complexities of ESOPs, including the benefits and risks associated. Through extensive experience valuing, structuring, and implementing ESOPs, GBQ has established long standing relationships with valuation advisors, attorneys, trustees, and lenders who are experts in the field.
Advantages
- Confidential transaction
- Sell for fair market value
- Rewards existing management and employees
- Ability to sell a minority interest
- Owners can exit the business gradually if desired
- Tax advantages to companies and selling shareholders
- Maintains legacy of owner and/or founder
Considerations
- It is necessary for companies to have a strong management team in place
- Owners may remain active in the business longer than desired
- Stable cash flow and operating performance
- Debt capacity may determine transaction or cash at closing amounts
- Unable sell for a strategic premium
M & A Services: