Overview
Based in Hudsonville, MI, Speed Wrench, Inc. began as a mobile repair service specializing in on‐site fleet maintenance for light-, medium- and heavy‐duty trucks. Over the next 32 years, the Company grew its core business readily and expanded into new markets through keen acquisitions and complimentary service offerings spread over seven divisions. Its original staff of five employees grew to 159, and Speed Wrench has three affiliates under its umbrella, and is an industry leader in West Michigan. The Company’s growth is due to its commitment to high quality customer service, diverse service offerings and a culture of ownership among its employees.
Situation
Speed Wrench implemented an employee stock ownership plan (ESOP) in 2010, and their newly formed ESOP purchased 49% of the Company stock. Management and employee-owners embraced an ownership culture and the Company continued to flourish. In 2013, the Company converted to an S Corporation and in 2020, the remaining individual shareholders sought a liquidity event for their ownership and Speed Wrench made the decision to become 100% employee-owned.
Solution
Speed Wrench’s management engaged SES ESOP Strategies to structure its second-stage ESOP transaction and to perform an analysis of its executive compensation obligations. After consultation and planning, a transaction was structured and implemented resulting in the ESOP becoming the sole shareholder of the Company. SES professionals managed the financial due diligence process and negotiated the sale of stock and closing of the transaction.
As a 100% employee-owned S Corporation, Speed Wrench can enjoy the benefits of operating without incurring federal or state income tax at either the corporate or the shareholder level, due to the tax-exempt status of the ESOP as the company’s sole shareholder.
“We’ve developed a strong employee ownership culture at Speed Wrench, and we highly value the employees who have helped us grow exponentially over the years,” said Brandon VanOverloop, Chief Operating Officer of Speed Wrench, Inc. “We couldn’t be more pleased with the work that SES ESOP Strategies did to help us become 100% employee-owned. They added significant value to the Company and greatly assisted the shareholders throughout the process.”
For more information on this transaction, please contact Mark Russell at 817.566.1013.