Engineering and Building Design Firm Rewards Employees’ Commitment to Clients, Becomes 100% Employee-Owned

Overview

Founded in 1978 and headquartered in Lititz, PA, The WEBBER/SMITH Group is a privately held engineering and building design firm that has grown to serve various food and beverage industry sectors, along with pharmaceutical and select industrial clients.  Over more than 40 years, the firm has earned a reputation for creating comprehensive solutions for complex food-safe environments. WEBBER/SMITH Associates, Inc. and its affiliated entities, AE Design, Inc. and EA Design Concepts, Inc., provide building and site evaluations, building design, structural, mechanical, electrical and refrigeration engineering, process and packaging systems design and food safety consulting. Its clients range from prepared foods and dairy producers to grocery, food service and public cold storage operators, and many have worked with the firm for decades. Company leaders believe their team members’ combination of technical proficiency and dedication to client satisfaction is foundational to the company’s reputation for excellence. 

Situation

The majority owner sought a succession plan that would reward the employees who helped build the business and keep the company independent. A key goal for the business’ evolution was to avoid selling the company to a competitor or a financial buyer. After a comprehensive evaluation of transition strategies, a 100% employee stock ownership plan (ESOP) was the approach that would maintain the unique client-focused culture of the firm and position the team for continued success in the years ahead.

Solution

WEBBER/SMITH engaged SES ESOP Strategies, along with its affiliated law firm, Stevens & Lee, to structure an employee stock ownership plan (ESOP) and guide the company through the transaction. The ESOP transitioned the firm to 100% employee ownership. SES provided the full range of advisory services, including financial due diligence, modeling of ESOP structures, raising financing and negotiating financial terms with the lender. Stevens & Lee handled all legal work and related documentation for the transaction. The deal also included management incentive plans and made the company an S corporation, providing significant tax advantages by effectively eliminating corporate federal and state income taxes.

“Our team members helped build this company over more than 40 years with their skill and dedication to clients, and we wanted to make sure they share in future success,” said Keith Shollenberger, P.E., President and CEO of WEBBER/SMITH. “SES and Stevens & Lee were strategic advisors throughout the transaction, offering clear guidance on both financing and technical matters and the attentive client care we hold in high regard.”

For more information on this transaction, please contact Ed Renenger, President and CEO, at 610.478.2238,  Ken Wanko, Managing Director, at 215.285.7190, Richard Grubb at 717.255.7362, Jack Freeman, Vice President, at 720.933.8677, Chandler Penn at 215.508.7702  or Otis McCullough, Sr. Financial Analyst, at 215.508.5640.