Company Overview
Founded in 1991 in Grand Prairie, TX, Lone Star Communications (Lone Star or the Company) is a premier provider of critical communication solutions for health care and educational facilities. Lone Star has expanded significantly over the past three decades, becoming a top five Rauland distributor and leading the industry in health care facility integrations. Company leadership credits this growth to their employees’ technical expertise and dedication to delivering sophisticated, industry-focused solutions for clients.
Situation
Lone Star aimed to implement a business transition plan that strengthens its employee empowerment values, rewards its dedicated employees, provides liquidity for its shareholder and ensures continued investment in the Company’s future growth. The Company sought a solution that would balance these objectives while ensuring continued operational efficiency and financial success. After thorough analysis, a minority employee stock ownership plan (ESOP) became the optimal objective.
Solution
Griffin Financial Group (Griffin), an affiliated company of SES ESOP Strategies, was engaged to explore various ESOP structures and financing alternatives that would meet the Company’s goals and objectives. To maximize tax advantages and align the Company’s financial objectives, a conversion to an S Corporation holding company structure was utilized.
Griffin successfully conducted a capital raise process with prospective senior lenders and negotiated the terms of the senior financing package with the selected lender, ensuring the shareholder’s liquidity goals were met while maintaining strong cash flow. Griffin also managed the trustee selection and due diligence processes and collaborated with SES, its affiliated ESOP-focused consulting firm, and Stevens & Lee, its affiliated law firm, to negotiate the terms of the deal and facilitate the Company’s reorganization, providing a seamless transaction.”
By becoming a minority ESOP, Lone Star reinforced its commitment to its employees while positioning itself for continued growth and success in the industry.
“Our Company’s growth and success are fueled by our dedication to innovation and our exceptional employees. The ESOP enables us to reward and share this success with the employees who have been instrumental in our growth,” stated Ray Bailey, Founder and CEO of LSC Companies, Inc. “With the expertise of Griffin and Stevens & Lee, we seamlessly navigated this transition, ensuring that our workforce remains an integral part of our journey forward and directly benefits from the company’s continued success.”
For more information about this ESOP transaction, please contact Mark Russell at 817.566.1013, Vince Capone at 215.508.7716 or Kyle Priebe at 215.508.5637.