Overview
Founded in 1968 in the East End of Long Island, NY, as a family business, W&G Holding Co., Inc. (Weber & Grahn Conditioning Corp. and W&G Service Company, Inc., collectively “Weber & Grahn” or the “Company”) has built a reputation of expertise in designing, installing and servicing heating and air conditioning systems, among other capabilities. From indoor pool dehumidification to wine room and geothermal systems, the Company excels in collaborating with architects and providing cutting-edge indoor and outdoor solutions that seamlessly integrate with nuanced architectural layouts. Weber & Grahn’s leaders believe that the industry experience and customer-centric dedication of their installation technicians have been the primary driver of business growth across more than five decades.
Situation
Company stakeholders and management sought a business succession strategy that would maintain the family business values and employee empowerment culture established by the original founders Fred Weber and Eric Grahn. As part of succession planning, they prioritized a solution that would reward employees with business equity, sustain and advance future business growth and provide a liquidity event for owners and management who would provide temporary guidance after the company’s evolution. Following a comprehensive analysis of various options, transitioning to 100% employee ownership through an employee stock ownership plan (ESOP) emerged as the best fit for the Company’s goals.
Solution
Weber & Grahn engaged SES ESOP Strategies (SES) and its affiliated law firm, Stevens & Lee, to assist throughout the ESOP transaction. SES led a comprehensive transaction analysis that included financial due diligence, models of various transaction structures, trustee selection and due diligence processes, term sheet negotiations and guidance through transaction closing. Stevens & Lee attorneys assisted with the sale and prepared transaction-related documents. Notably, the shareholders are able to defer taxes on the gain from the sale under Section1042 and also allow the Company to elect S Corporation status after the transaction.
“Our employees are committed to our family-business values and drive business growth. Evolving to an ESOP allows us to maintain our culture and reward our dedicated team for their contributions by providing an equity stake in future success,” said Rebecka Russo, President of W&G Service Company, Inc. “SES and Stevens & Lee professionals provided best-in class service and expertise in navigating complexities to help us reach a proud company milestone.”
For more information on this transaction, please contact Jim Steiker, Chairman, at 215.508.5643, Ken Wanko, Managing Director, at 215.285.7190, Kyle Priebe, Sr. Associate, at 215.508.5637 or Davis Rosato, Sr. Financial Analyst, at 215.508.7706.