Corporate Solutions Group: ESOP Corporate Finance

ESOP Corporate Finance

Business owners face numerous choices through out the life-cycle of their Company. The owner’s equity stake in their firm often represents the majority portion of the owner’s net worth, therefore one of the most important choices faced by owners relates to the divestiture and monetization of a portion or all of their ownership stake. These are complex decisions where the alternatives, although superficially similar, may result in very different actual proceeds to the owner.

Historically, business owners considered an IPO or, more often, a sale to a strategic buyer as their expected divestiture strategy. Although viable for many companies, CSG believes that our clients are best served by considering a full range of options when considering alternatives, including using leveraged Employee Stock Ownership Plans (ESOPs).

Through an appropriately structured and leveraged Employee Stock Ownership Plan, CSG offers owners of privately-held businesses an unsurpassed opportunity to gain significant personal liquidity. Depending on the owner’s goals, an ESOP may be for a 100% interest, providing the ultimate exit strategy, or partial, enabling an owner to extract a portion of the tax-free value of a company and still maintain full operating control. By maintaining an equity position, the owner can still earn income and increase personal wealth as the company flourishes.

In addition to increasing personal liquidity and enhancing asset diversification, the versatility of an ESOP also makes it an attractive solution for succession planning, management buyouts and acquisitions.

This innovative financial tool provides significant tax benefits that no other liquidity option delivers, including a lifelong deferment (and thus elimination) of capital gains taxes, as well as significant, ongoing tax benefits to the owner’s company. Valuable tax advantages plus built-in customization make this an invaluable tool for achieving personal and business goals.

CSG is the Country’s leading provider of corporate finance services for ESOP transactions for middle-market Companies. We have developed numerous proprietary methodologies that reflect the industry’s best practices and serve to optimize all aspects of a transactions for our client’s benefit. Our transaction management skills ensure that these complex divestitures are closed in a time efficient and cost effective manner.

See List of ESOP Transactions