Structuring M&A and Private Equity Sales Involving ESOPs: Alternative Strategy in a Down Market

Evaluating Advantages and Risks, Best Practices for Structuring the Deal

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, November 1, 2016

Recorded event now available

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Program Materials

The CLE webinar will examine the growing use of leveraged employee stock ownership plans (ESOPs) in structuring acquisitions, divestitures and private equity sales in a down deal market. The panel will discuss the advantages and challenges of selling all or part of a business to an ESOP and best practices for structuring the transaction.

Description

ESOPs provide an alternative strategy for selling a business. ESOPs allow company owners to cash out of their businesses, while simultaneously rewarding the employees who helped build the business. When structuring a deal, counsel should consider the advantages and risks of using leveraged ESOPs as an option for transitioning the ownership of a business. Counsel must also understand the mechanics of structuring a leveraged ESOP transaction.

The benefits of using ESOPs in structuring deals include the opportunity to execute a partial rather than complete sale, significant tax advantages, increased cash flow, and ability to attract seller financing. Drawbacks to the ESOP structure are the potential adverse impact on owner equity and company debt and payment delays, among others.

Listen as our authoritative panel discusses the latest developments in the use of leveraged ESOPs as an option to move acquisitions, divestitures and private equity sales forward in a slow market. The panel will discuss the pros and cons of the structure and considerations for counsel when structuring deals with ESOPs.

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Outline

  1. Current trends in use of ESOPs to structure deals
  2. Tax advantages of ESOP transactions
  3. Non-tax benefits and risks of the ESOP structure
  4. Best practices for structuring the transaction

Benefits

The panel will discuss these and other key issues:

  • What are the latest trends in the use of ESOPs in structuring acquisitions, divestitures and private equity sales?
  • What are the tax and other benefits of using leveraged ESOPs in structuring deals? What are the downsides of the ESOP structure?
  • What are the mechanics of structuring a leveraged ESOP transaction?

Faculty

Jacob, Anthony
Anthony J. Jacob

Partner
Hinshaw & Culbertson

Mr. Jacob is engaged in general corporate practice, including various aspects of private merger, acquisition,...  |  Read More

Johanson, David
David R. Johanson

Senior Partner
Hawkins Parnell Thackston & Young

Mr. Johanson assists clients in general corporate matters and in employee ownership, benefit, ERISA, and related...  |  Read More

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