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