Who is a Good ESOP Candidate?

ESOPs operate successfully in a broad range of companies—large and small, public and private. The ideal private company candidate will meet most of the following criteria:

  • The company has strong, stable cash flow and a history of increasing sales and profits.
  • The ownership group is interested in remaining involved/participating in the business.
  • The owner(s) can be patient — they are not seeking immediate cash payment in full.
  • The ownership group is concerned about employees and/or the long term future of company. They are motivated by “legacy” or mission goals in addition to cash.
  • There is a lack of cash strategic buyers willing to pay significant premium for the company.

If you feel your company would be a good fit for an employee stock ownership plan, please contact us and we will be happy to answer any questions you might have.