Business owners and advisors who come to Marshall & Stevens with questions about an Employee Stock Ownership Plan are at various stages of the ownership transition journey. They may have only just heard about an ESOP and want to learn more, or they may already be looking for a plan that meets some specific goals they have in mind.
Selling your company while minding the day-to-day challenges of running it can seem daunting whether to an ESOP or a third party. Properly designing an ESOP, and successfully bringing an ESOP transaction to closing, requires a level of expertise and specializing that is in many ways even more acute than in a third party sale.
Marshall & Stevens is committed and tenured team can significantly minimize disruption and anxiety by identifying, understanding, and managing complexities, and presenting the smartest options along the way. That frees you and your team to make informed decisions and work toward the right results, without distraction from the operational bottom line.
The feasibility process will reveal the most effective plan design, considering the seller’s goals and objectives and any potential constraints. Out of this process, we deliver a comprehensive ESOP sell-side strategy that considers the initially identified goals, the tax impact of various structures, liquidity needs, and other factors. We fully prepare you for what to expect from the transaction so that you can make informed decisions that maximize outcomes for all stakeholders.
Working with an insightful and fully immersed team guiding you through the feasibility and plan design process assures that you don’t waste valuable resources, miss opportunities, or settle for a less than ideal transition. Ultimately, it sets up the ESOP for long-term success. Our transaction structure and plan design approach has been honed through our work on hundreds of successful ESOPs, in many different roles. We:
We don’t stop at feasibility, design, and implementation. Marshall & Stevens exists to help our clients sustain the value created by the ESOP throughout its entire lifecycle. We help trustees, boards of directors, and senior management teams understand the long-term impacts of ESOP policy decisions. Our analytical decision-making framework helps you to promote long-term sustainability and incentivize broad-based employee engagement.
We help you enhance employee motivation across all levels of the organization by assuring that plan participants can connect their behaviors and performance to the value of the company and their ESOP accounts.
Whether the board is approached by a motivated suitor or chooses to pursue a sale for strategic reasons, the ESOP will add a nuanced layer of complexity to the sale of the company. That will be true both in the assessment of an offer and the transaction execution. Even if the company is not actively marketed for sale, the ESOP creates a fiduciary responsibility to seriously assess all legitimate offers, and potentially even “shop” the Company to determine the strength of the offer in hand. New and long-time clients turn to Marshall & Stevens to vet and negotiate an initial offer, structure key terms around certain must-have provisions, or in certain circumstances, to manage and execute a comprehensive sale (auction) process.
Regardless of where you are in your business lifecycle, or your journey to discover whether an ESOP is right for you, please contact us to schedule a no-obligation introductory call.
Our ESOP Valuation team collaborates with our internal multi-disciplinary professionals to provide the value analyses and fresh independent opinions to fiduciaries, financing sources and investors for public and private company transactions.
Yes, we are experts at assisting business owners assess, form, and implement ESOP transactions. Whether you are beginning to learn about ESOP’s, or are looking to work with an experienced advisor, contact us for a confidential, no obligation introductory meeting to learn more.
While valuation is a key component of assessing whether an ESOP is a viable strategy in your situation, many other factors come into play in deciding to implement an ESOP. We always recommend a Feasibility and Plan Design assessment, which includes a range of value for the company. Following that assessment, you will have a detailed understanding of the outcomes to the sellers, the Company and the employees, and then then decide whether to move into the implementation phase.
When properly structured, an ESOP transaction can enable the sellers to avoid the capital gains tax on the sale of stock, and can also result in the Company being tax free over time. Contact us to learn more about how this can be accomplished in your situation.
Yes, one of the great things about an ESOP is the flexibility that exists to structure an ESOP in various ways. You can sell all or part of a company to an ESOP, or you can contribute stock directly and receive a tax deduction for the fair market value of the stock contributed. You can also form an ESOP, contribute cash to it and receive a tax deduction, and then have the ESOP buy stock from the shareholder at a later date.
Marshall & Stevens provides Fairness and Solvency Opinions, valuation analyses, investigative accounting, and expert witness services to assist public and private clients with their important transactions and litigation matters.
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