Overview
Headquartered in Downingtown, PA, ValSource is one of North America’s largest independent pharmaceutical, medical and biological validation services companies. The Company has more than 350 full-time engineering and validation employees and consults with clients nationwide. ValSource was founded in 1996 and prides itself on its core principles of integrity, efficiency, innovation and knowledge.
Situation
In 2016, ValSource engaged SES ESOP Strategies to complete a minority employee stock ownership plan (ESOP) transaction. Following that initial transaction, the ESOP owned just over 36% of ValSource. Seeking to become 100% employee-owned, ValSource management again reached out to SES in order to complete a second-stage ESOP transaction.
Solution
ValSource engaged SES to assist it in structuring a transaction whereby all of the Company’s outstanding stock not owned by the current ESOP would either be sold to the ESOP or redeemed by the Company. SES professionals compiled extensive due diligence information, structured the transaction, negotiated the sale of stock to the ESOP and managed the closing of the transaction. In addition, the team at SES assisted in structuring a new credit facility from M&T Bank, the company’s existing lender. ValSource completed the C Corporation sale utilizing a §1042 tax deferral. At the close of the transaction, ValSource became a 100% employee-owned Company, with the ESOP as the sole shareholder.
“We are pleased with the work SES ESOP Strategies did during our initial minority transaction and were happy to choose the firm to assist us in becoming 100% employee-owned,” said David Calvaresi, Chairman of the Board. “This is a significant step for us and we’re very proud to make this final step of full employee ownership.”
For more information on this transaction, please contact Jim Steiker at 215.508.5643, Sean-Tamba Matthew at 215.508.7705 or Ken Wanko at 215.508.7707.
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