ESOP Implementation Case Study
Legend Seeds, Inc. headquartered in De Smet, SD, was founded in 1990 by Glen and Janet Davis as an independent seed company. Over the past 29 years, the company has grown into one of the largest independent seed companies in the country, servicing dealers and growers in seven upper Midwestern states and Canada. With a customer-driven focus and access to the latest genetics and technology in the seed industry, Legend provides its farmers with the resources to maximize productivity on their acres down to the square inch.
As a family-owned business, Legend’s management team and ownership were seeking an ownership transition solution to accomplish the following:
- Provide a liquidity event for current ownership
- Assure Legend’s future beyond the current ownership for the stability of its employees, dealers and customers
- Allow Legend to continue to operate with its core values and focus in place
- Ensure Legend remain a customer service driven company, dedicated toward providing high-yielding, consistent producing, top quality products
Our firm was engaged by Legend to develop a transaction utilizing a newly established employee stock ownership plan (ESOP) to accomplish the goals set out by Legend’s management team and ownership. After evaluating several ESOP transaction structures and alternatives, Legend ultimately determined that a minority sale to the ESOP would be the optimal fit and engaged us to implement the ESOP.
As part of the engagement, our professionals:
- Designed a transaction structure accommodating ownership’s goals of a liquidity event in a tax efficient manner while maintaining historical practices with regard to its shareholders
- Negotiated with the ESOP Trustee on the sale of a minority ownership stake in the company to the ESOP
Upon successful completion of the minority sale to the ESOP and creation of approximately 100 new employee-owners of Legend, Glen Davis, CEO and Founder of Legend said, “With so much change in the seed industry, we’ve spent a lot of time planning for the future of Legend Seeds to provide certainty and stability not only for our employees, but for our dealers. This transition to an ESOP will help assure Legend’s future for both staff and dealers, allow Legend to continue to operate with its core values and remain a strong, healthy, independent seed company with an incredibly bright future. SES professionals were instrumental in ensuring a successful transaction and we couldn’t be happier with the result.”
For more information on this transaction, contact 888.SES.ESOP.