ESOP companies hold unique benefits compared to other buyers, but these advantages must be effectively showcased and utilized. To that point, we will delve into these benefits, which include favorable tax status, a culture of employee ownership, and the use of 1042 structures, among others. This exploration will be grounded in the practical experiences of a company that has been wholly ESOP-owned since 2004 and has successfully carried out multiple transactions in recent years. Notably, many of these transactions were in competitive scenarios involving strategic buyers and private equity contenders.
Learning Objectives:
Define how ESOP-owned companies can be particularly successful in the competitive acquisition market.
Explain how tax-advantaged ESOP structures can be used to acquire companies at lower values, and how these values are competitive on a net-after-tax basis.
Explain the challenges ESOP companies face during acquisitions.
Wil Becker, n/a
Managing Director Chartwell Financial Advisory Minneapolis, MN