Posts By: William Stewart
William Stewart
William A. Stewart works in Growth Capital at PCE Investments, a leading investment bank for Florida’s mid-market companies, offering a full range of services including mergers and acquisitions support, business valuations, litigation support, growth capital options, fairness opinions, advisory planning, research and stock-index services. Stewart’s work focuses primarily on the Employee Stock Ownership Plan (ESOP) practice, including executing sales to ESOPs, ESOP feasibility studies and shareholder and trustee financial advisory.
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Jul 1, 2010 - by William Stewart
While the M&A market continues to recover, business owners are utilizing Employee Stock Ownership Plans (“ESOPs”) to satisfy the need to convert some of their illiquid privately held company stock into cash and other liquid investments. The ESOP is attractive due to significant tax savings to the owner and company, flexible deal structures and speed with which a transaction can be completed. With higher capital gains taxes looming in 2011, now is a great time to evaluate this liquidity strategy.
The flexibility of a partial sale to an ESOP provides business owners the ability to:
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Sell a portion of the business
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Save taxes; both personal and corporate
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Motivate and retain employees
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Retain upside in the business
Consider John Doe, a 50 year old owner of an electrical distribution company in the southeastern United States. John started the business 15 year ago, has achieved fantastic growth but a recent fall off in the business has John interested in exiting the business completely at age 60 (10 years from now). However, the stresses on his business and decrease in his net worth have him concerned about his personal liquidity and financial security today.
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