JDAVIS is a multi-disciplinary design firm with offices in Raleigh, NC and Philadelphia, PA. Founded more than two decades ago, the firm serves clients in the Mid-Atlantic and Southeast and has 80 employees, including professionals in architecture, landscape architecture, planning, interior design and procurement. JDAVIS’s areas of expertise include multi-family housing, urban design and planning, affordable housing, student housing, senior living, commercial office, mixed-use, retail and master planning. The firm prides itself on collaboration, creativity, community and nurturing the growth of employees.
The JDAVIS leadership team was challenged with navigating a multi-generational ownership transition, given the diverse ages of the ownership team and the pending retirement of one of the founders. They explored a third-party sale, which was rejected because it would not maintain and pass on the legacy they built over the years. An internal transition was also examined, but was not an ideal fit because there was just not enough liquidity among the younger generation to purchase the large blocks of stock needed to facilitate the transition. An employee stock ownership plan (ESOP) seemed to be a perfect solution to both transfer ownership and preserve the firm’s legacy, while also rewarding employees and minimizing cultural disruption.
JDAVIS engaged SES ESOP Strategies and its affiliated law firm, Stevens & Lee, to assist in structuring and forming a new ESOP, gathering and organizing financial due diligence information, negotiating the terms of a third-party loan and a subordinated seller loan to the firm and closing the transaction. The ESOP purchased newly issued shares representing 100 percent of the equity of JDAVIS Architects from the firm. The transaction closed Sept. 17, 2021. JDAVIS is now a 100-percent employee-owned firm, and as an S Corporation, it is effectively exempt from corporate federal and state income taxes.
“An ESOP is a perfect fit for our firm to maintain its legacy and facilitate a seamless ownership transition for the benefit of all professionals, and we are pleased that professionals from SES ESOP Strategies guided us through the process,” said Larry Zucchino, Chairman of the Board of JDAVIS Architects.
For more information on this transaction, please contact Ed Renenger, President and CEO, at 610.478.2238.