Boiler Systems Designer and Servicer Rewards Employee Dedication, Becomes 100% Employee-Owned

Overview

Founded in 1956 in Kenilworth, NJ, Miller & Chitty Co., Inc. (M&C) has grown across decades to provide of a range of boiler systems design, maintenance and efficiency solutions to national and global manufacturers in the Northern New Jersey and Greater New York City regions. From emergency, on-demand equipment service and parts replacements to boiler retrofits, inspections, systems optimizations and training, the company has developed a reputation for swift, technically superior equipment support. M&C’s owners attribute the company’s success to the expertise of its technicians and their dedication to achieving clients’ boiler systems performance goals and operations plans.

Situation

M&C’s owner sought a business succession strategy that would empower the employees whose contributions have driven the company’s growth. As part of exploring succession strategies, the top priorities were to reward employees with business equity, sustain and advance future business growth and provide a liquidity event for the exiting owner. After a comprehensive analysis of various strategies, transitioning to 100% employee ownership through an employee stock ownership plan (ESOP) proved to be the natural fit for the company’s business and culture goals.

Solution

M&C engaged SES ESOP Strategies along with its affiliated law firm, Stevens & Lee, to structure the new ESOP plan and lead every phase of its implementation process. SES guided the company through the ESOP transaction by conducting a transaction analysis, financial modeling and due diligence, while also advising on transaction and management negotiations. Stevens & Lee attorneys assisted with the sale and prepared key documentation. The transaction also provided shareholders with the opportunity to defer capital gains taxes under Section 1042.

“The success of our business has always been tied to the professionalism and technical expertise of our employees, so it was our central focus to reward their long-time contributions,” said John Ferko, President of Miller & Chitty Co., Inc. “This succession milestone would not have been possible without the insight and guidance provided by SES and Stevens & Lee. Their counsel throughout the ESOP planning and transaction process helped us transfer ownership in a way that empowers our employees and strengthens the company’s future.”

For more information on this transaction, please contact Vince Capone, Sr. Vice President, at 215.508.7716, Ed Renenger, SES President and CEO, at 610.478.2238 or Alex Puskar at 717.399.1734.