ESOP Transactions - ESOP Knowledge Center
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ESOP Transactions

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ESOP transactions are a critical aspect of employee stock ownership plan (ESOP). Check out these ESOP transaction questions.

What is a leveraged ESOP transaction?
An ESOP transaction is leveraged if it borrows money to purchase shares of the employer’s stock. The loan transaction may be from a bank or financial institution, or the selling shareholder may finance the ESOP transaction by taking back a note for part or all of the purchase price. The ESOP transaction is usually secured... Read More

Can a majority shareholder remain in control of the company after selling stock to an ESOP?
The best way to remain in control following an ESOP transaction is to sell only a minority interest in the company to the ESOP. In addition, a shareholder may participate in the administration of the ESOP, subject to the fiduciary requirements. Read a case study on selling a minority stock interest in a Private Company Read More

ESOP Transactions as Acquisition Strategies
ESOP transactions can take the form of acquisitions. As ESOP companies mature, particularly 100% ESOP-owned “S” Corporations, they often find they have the resources and the strategic drive to purchase other companies. ESOP transactions can be a win-win situation for acquirers, sellers and employees, but there are many practical and legal considerations. Learn some of... Read More

Second-Stage ESOP Transactions or Mature ESOPs
Second-stage ESOP transactions have a unique set of specific issues to be considered. , What does a typical second-stage ESOP transaction looks like? How does it differ from a first-stage ESOP transaction? Presented by James G. Steiker, Chairman & CEO – SES Advisors, Inc. Read More

Demystifying Warrants – How & Why are they Used in ESOP Transactions?
ESOP transactions often employ warrants which are used to provide an enhanced return to investors or debt holders who provide a portion of the ESOP company’s debt capital. A warrant is a financial instrument that gives the holder a right to purchase issuer stock at a specified price at a future date or during a... Read More

Anatomy of an ESOP Transaction
ESOP transactions (Employee Stock Ownership Plans) offer compelling benefits to selling owners, companies and employees. ESOP transactions can create liquidity. ESOP transactions can address business succession. ESOP transactions can stimulate employee productivity and morale. And they can do all of that with significant tax benefits, making an ESOP an appealing choice for many companies. But... Read More

ESOP Transactions and Your Exit Plan
ESOP transactions often result in a need for an exit plan. At its core, exit planning is about making a significant change in ones business and life. Therefore, the very personal aspect of this planning mean business owners who are thinking about an exit plan struggle on many levels with advancing forward. Who is a... Read More

ESOP Transactions using warrants
ESOP transactions using warrants are the focus of this article by SES Chairman & CEO Jim Steiker. See how warrants can be used to bridge the gap in a larger ESOP transaction between bank financing and the full price of the sale. Warrants in ESOP Transactions Jim Steiker describes how warrants are used as part of... Read More

Using Warrants in ESOP Transactions
Using Warrants in ESOP Transactions SES Chairman & CEO Jim Steiker explains how warrants can be used to bridge the gap in a larger ESOP transaction between bank financing and the full price of the sale. Published in the NCEO March-April 2013 Edition of the Employee Ownership Report Is an ESOP right for your company? Use... Read More

ESOP Transaction exit plans for different size businesses
ESOP transaction exit plans differ greatly for different sized businesses. Business owners need to know where they fit on the exit planning transfer spectrum as well as how to begin your exit planning today.   The Exit Planning Transfer Spectrum The exit choices that are available to privately-held business owners are largely dependent upon the... Read More

ESOP Transaction Plans Let Founders Cash Out
ESOP transactions are the focus of this article profiling a number of ESOP companies including Organically Grown Company, an SES Advisors client. ESOP Plans Let Founders Cash Out This article profiles a number of ESOP companies including Organically Grown Company, an SES Advisors client. Published June 17, 2010 on Is an ESOP right for your... Read More

ESOP transactions vs. 3rd Party Sale
Battle Royale: ESOPs vs. 3rd Party Sale Are ESOP transactions really more complex than other ways to sell a business? Discover the pros and cons of ESOP transactions vs. 3rd party sale. Before you make up your mind it’s best to explore all your options. Dig a little deeper to find out which option best... Read More

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