Automotive Accessories Manufacturer Bolsters Employee-Centric Culture, Commits to Employee Ownership

Founded in 2003 in Phillipsburg, PA, DiamondBack Truck Covers (DiamondBack or the Company) has grown from an entrepreneurial garage operation to a manufacturing corporation that builds and supplies high-strength truck bed covers and other automotive accessories to customers across the country. The Company’s “Built Different” branding not only refers to their patent-protected, industry-leading truck covers and products, but to the community- and employee-focused values that define their way of doing business. DiamondBack’s leaders believe that company success has been fueled by their workforce, who bring technical skill and dedication to delivering top-quality products to the job each day.

Situation

DiamondBack sought to create meaningful employee benefits and maintain its employee-forward culture in its business succession evolution. The owners envisioned a long-term business plan that would reward the dedication of their workforce with a portion of company equity over time, sustain growth among key customer sectors and provide a partial liquidity event for stakeholders. After a comprehensive evaluation of transaction approaches, a minority stock redemption followed by a contributory employee stock ownership plan (ESOP) emerged as the natural fit for the Company’s goals.

Solution

DiamondBack engaged SES ESOP Strategies, along with affiliated law firm Stevens & Lee, to structure and implement the new ESOP. SES guided the entire life cycle of this unique transaction, which involved extensive modeling on cashflows to create a strategic structure for a partial redemption of Company shares. The contributory ESOP, including a sizable initial contribution that allocated shares to reward longevity, was an efficient way to create long-term and sustainable employee ownership. SES raised the debt for the redemption and attorneys from Stevens & Lee prepared the ESOP transaction and redemption-related documents and led lending negotiations.

“Our employee community is what drives our business, and rewarding their loyalty and dedication with company ownership was a top priority in our long-term plans,” said Ben Eltz, CEO of DiamondBack Covers. “SES ESOP Strategies and Stevens & Lee were great partners throughout the transaction, providing guidance through financing details and clearing hurdles with efficiency. They allowed us to empower our employees to share in the future success of their work.”

For more information about this ESOP transaction, please contact Ed Renenger, SES President and CEO, at 610.478.2238, Mark Russell, Heads of Finance, at  817.566.1013 or Sean-Tamba Matthew at 215.508.7705.