International Architectural Firm Preserves Legacy, Strengthens Long-Term Growth by Becoming 100% ESOP Owned

Overview

MJM Architects, Inc. (MJM) was founded in 1986 and is based in Nashville, Tennessee. MJM provides architectural services for leading retailers, REITs and developers primarily in the banking, restaurant, entertainment, fitness and medical industries. MJM holds licensure in the United States, Canada and Australia, and provides architectural, structural engineering, and interior design services. The Company has extensive experience in architectural service offerings with experience in single tenant, multi-tenant and experiential building design, and graphics and visualization.

Situation

MJM leadership sought a transition plan that would provide company ownership to its employees, strengthen long-term growth and sustainability of the company, provide a management transition solution for the next generation of leaders and provide liquidity to the partners. With these goals in mind, it was determined that an employee stock ownership plan (ESOP) was a natural fit.

Solution

MJM engaged SES ESOP Strategies and its affiliated law firm, Stevens & Lee, to assist in structuring and forming a new ESOP, gathering and organizing financial due diligence information, negotiating financial terms with a senior lender and closing the transaction on an accelerated schedule. The ESOP purchased newly issued shares representing 100 percent of the equity of MJM Architects and the company remained an S Corporation, effectively retaining key exemptions from corporate federal and state income taxes. The transaction included a management incentive plan that creates a framework for incentivizing the next generation of leaders.

“We believe an ESOP is integral to building on past success and facilitating a seamless ownership transition for the benefit of all employees,” said Stephen Maher, CEO of MJM Architects. “We are pleased that professionals from SES ESOP Strategies guided us through the process.”

For more information on this transaction, please contact Ed Renenger, President and CEO, at 610.478.2238.