The ESOP Alternative


EPI members appreciate the value of a extensive exit planning toolkit. When their clients prioritize tax-efficiency and legacy preservation, employee ownership may be the best strategy.

See how ESOPs compare to other transaction options.

M&A Isn't Always the Answer

Whether business owners are concerned about damaging their legacies, abandoning trusted employees, or giving up on potential multi-generational assets, their fears are valid and, at times, stifling.

Even if they ultimately settle for a traditional third-party or private equity transaction, the capital gains tax burden can often be painful.

 

Employee Ownership is a Meaningful Alternative

Employee stock ownership plans help shareholders unlock equity value, while providing meaningful incentives to their companies and employees.

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Tax-Efficient Diversification

By reinvesting their sale proceeds in a qualified replacement property, selling shareholders can defer and potentially eliminate capital gains taxes (1042 rollover).

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Continuity & Potential Upside

Post-transaction, a company’s board operates the business. Selling shareholders often maintain salaries and meaningful roles in the business and may continue to hold stock.

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Estate Planning Opportunities

Sellers can make gifts of retained interest to family and prepare for estate tax burdens at a time when a company’s value is depressed by leverage.

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Legacy Preservation

ESOPs enable companies to remain independent, stay put in local communities, honor long-tenured employees, and maintain enduring cultures.

 
 
 
 
 
 

ESOP "Best Fits"

So, when is it worth exploring a leveraged ESOP with your client? Our David Blauzvern, shares baseline metrics and standard scenarios that commonly yield successful employee ownership transactions and drive sustainable business transitions.

 

Interested in learning more?

Schedule a free call with David below. He'd happy to your employee ownership questions, including ESOP feasibility, the transaction process, and plan management.
 

Why do CEPAs Trust CSG Partners?

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Experience

Our multi-disciplinary team's primary focus is ESOPs, and our transaction volume is unmatched in the industry. That translates to extensive institutional knowledge and a deep understanding of the variability of employee stock ownership plans.

Analytics-Focused

We leverage proprietary modeling and research tools – refined and developed throughout our 20+ year history – to deliver data-driven ESOP recommendations and solutions.

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Financial Reach

Our dedicated capital markets team has access to the same financing sources as private equity firms and top investment banks. In the last five years alone, 30+ bank lenders and funds have financed CSG-led ESOP transactions.

300+

Transactions

25K+

Employee Owners

$25Bn+

in Enterprise Value

50+

National Awards

LEARN MORE

For additional articles and videos, from our advisors visit our Colorado ESOP resources library.

CHECK OUR RECORD

We've built successful ESOPs for clients nationwide, across all industries.

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Our nationally-recognized advisors build custom, analytics-driven ESOP strategies.