The principals of Pilot Hill Advisors, a national ESOP advisory firm, are pleased to announce that a Long Island-based client successfully completed a second-stage ESOP buyout.
Our client completed a 30% ESOP sale several years ago to begin his ownership transfer. He decided to start with a small ESOP sale to first "see how it worked." After repaying the debt associated with this initial transaction, he sold another 40%, taking the ESOP's ownership up to 70%.
The sale was financed with bank debt under terms that allowed the company to finance growth strategy and create liquidity for the founder outside of the business.
This transaction is one example of how successful entrepreneurs can design an ownership strategy that suits both their financial and non-financial objectives, rather than that of a third-party buyer.
One of an ESOP's greatest strenghts is the abiltiy to facilitate a variety of transaction structures that can be suited to both the company's ability and a seller's needs.