Overview
Seattle Gymnastics Academy (SGA) has been providing quality gymnastic instruction to Seattle communities for more than 40 years. Growing from a single facility, SGA now serves over 5,000 gymnasts across four expansive locations. Company leadership credits the business’s prosperity to its highly qualified staff and coaches, who are committed to providing industry-leading training, learning and competition opportunities with the utmost attention to safety.
Situation
As a partially ESOP-owned company, SGA sought a business transition plan that would further reward the commitment of its staff and instructors through company ownership, strengthen long-term business growth as an S-Corporation, solidify the business’s future management timeline and provide liquidity for shareholders. Completing the transition to a full 100% ESOP met all these goals.
Solution
SGA’s majority shareholder engaged SES ESOP Strategies’ affiliated law firm Stevens & Lee to represent him in the sale of the remaining shares to the ESOP. All company stock was purchased by the ESOP, the transaction closed in July 2023 and a strong management team was put in place to guide the future success of the business. Vested in the success of the overall brand, the new employee owners in all SGA facilities no longer worked under the pressure to outperform other locations. Rather, they were more motivated to maintain high-quality instruction, deliver meaningful customer engagement and offer forward-thinking input for improving company facilities, equipment and growth. Another notable result of becoming a 100% ESOP-owned was the company’s conversion from a C-Corporation to an S-Corporation, which allows SGA to benefit from key exemptions regarding corporate federal and state income taxes.
“Becoming fully ESOP-owned empowers our coaches and staff and rewards their commitment to top-tier instruction through employee ownership,” said John Sweeney, Chairman of SGA, Inc. “We are proud to have our employees in all facilities unified and invested in the growth of our business and its mission to teach a dynamic and engaging sport in our home communities. Stevens & Lee provided essential guidance during this complex transition.”
For more information on this transaction, please contact Ed Renenger, President and CEO, at 610.478.2238.