Prioritizing client education to empower decision makers throughout their transaction

Employee Stock Ownership Plans (ESOPs) provide significant benefits to business owners, and as a result, the ESOP liquidity strategy has become increasingly popular. This strategy, however, is not without complications, so you must understand the ESOP transaction and implementation processes before you decide to implement an ESOP at your company.

Companies that are required to prepare financial statements for external reporting face complex and serious issues. Failing to timely file financial statements or comply with the reporting requirements could lead to fines, lawsuits, or other damaging consequences. Moreover, with fair value accounting (also known as the mark-to-market accounting practice) becoming more prevalent today, financial executives responsible for filing the financial statements have a more demanding role than ever before. While fair value accounting might provide a more accurate asset and liability valuation on an ongoing basis to users of the financial statements, financial executives are not necessarily prepared to accurately determine fair value of all assets and liabilities.

Determining when and how to exit your business is one of the most important and personal decisions you will make throughout your career. An Employee Stock Ownership Plan (ESOP) is a particularly attractive vehicle, given the flexibility it provides. An ESOP offers a tailored approach to selling your business. Selling to an ESOP offers meaningful liquidity while providing significant benefits to the company’s employees and delivering a powerful corporate finance tool that provides tremendous tax savings to both the owners and the company.

There are thousands of firms offering investment banking services in the United States. So how do you choose the right one or BEST one for you? Below, we describe the different categories of investment banking firms and provide a list of widely recognized firms that offer quality services. There are too many firms to list all of them. We used third-party research and have provided website links to the lists. However, these are not comprehensive lists of quality investment banking firms, so the absence of a firm name does not imply that the firm lacks competence.

Most entrepreneurs spend so much time planning, building and managing their companies that they don’t actively consider and plan for their ultimate exit. Not surprisingly, owners want to sell when the market is hottest, and they are ready to retire. Yet life and market cycles rarely coincide. The risk is that once your company or its industry peaks, or market trends change which threatens growth, a seller may have missed the most opportune time to sell. Don’t wait until the economy or your niche evolves unfavorably, or an unplanned personal issue creates a company crisis.

On their face Employee Stock Ownership Plans (ESOPs) appear to be a vehicle for employee ownership and not something that invites Private Equity Group (PEG) investment due to differing ownership structures. On the contrary, ESOPs and PEGs can co-exist in a mutually beneficial relationship. In many cases, PEGs view ESOP companies as having the exact characteristics they look for in target investments.

In many businesses, ownership and management teams strive to define and implement a culture that differentiates their company from its competitors. Creating an Employee Stock Ownership Plan (“ESOP”) not only preserves but often enhances corporate culture. For years, we have seen companies use ESOPs and various other ownership-sharing tools to attract, retain, and motivate talented individuals. Compelling research continues to highlight that employee ownership can be a powerful tool that yields enhanced corporate performance especially when paired with an “ownership culture.”

Fairness opinions are a fact of life in transactions involving public companies. There is a consensus that the fairness opinion is a powerful tool in protecting boards of directors from liability related to a transaction. For a public company, a board of directors’ careful consideration of an independent fairness opinion can be the strongest protection against accusations of, and liability for, fiduciary failure. But, why do privately held companies need a fairness opinion?

Selling your business can be stressful and overwhelming, and many factors must be considered in this high-stakes transaction: timing, deal structure, and legacy goals are just a few. However, armed with knowledge and guided by experienced professionals, business owners can expect a profitable and efficient transaction. Be aware of the following preventable mistakes so you can anticipate and prepare for specific issues that may come up during the deal process.

Family-owned businesses, a key pillar in the American economy, make up a significant number of the privately held companies across our country. Although these companies cut across all industries and range in size from small to large, they all share common challenges. The most daunting of these challenges is how to manage the transition of the business from generation to generation.