For many business owners, the sale of their company is a once in a lifetime event. Selling your company to the employees may be the right choice, but don’t overlook the fact that the ESOP is a third-party buyer. Business owners who choose an ESOP exit strategy typically have different motivating factors for the sale. While price is important, issues such as company legacy, employee welfare and local community may be important factors as well. Advising business owners on ESOP exit strategies has always been the fundamental core of our service offering.
Prairie will help determine a path that is appropriate for the unique characteristics of our client. It may take the form of a competitive auction or single target sale process.
Our ESOP sell-side approach is comprehensive. We begin by understanding our client’s objectives. Our in-depth valuation guidance will provide an indication of what to expect from an ESOP transaction. We will create a structure that helps achieve short and long-term goals whether its immediate liquidity or fixed-income focused.
Develop marketing materials
Debt capital raise (if needed)
Arrange transaction team
Once valuation and transaction structure has been conceptualized, we will begin our process by developing confidential marketing materials which are critical to explaining the merits of the transaction to the lending community and the ESOP fiduciary. We will begin contacting various lending institutions in addition to other professionals who will be vital to a successful transaction.
Buyer due diligence
Select financing sources
Once the transaction teams have been arranged, we will begin to coordinate due diligence with the ESOP team and begin analyzing term sheets from various lending institutions. We will advise on selecting a lending partner that delivers the best overall fit to the transaction. Once the ESOP team has had time to conduct their analysis, we will begin negotiations.
Coordination of legal documents
Resolve open issues
Close and fund transaction
Our team brings a wealth knowledge during the final stages of a transaction. Without proper representation, the process can often become stagnant. Time is the enemy. We will remain actively involved to help ensure all parties are moving towards close.
Since our inception, Prairie Capital Advisors has served business owners and ESOP Fiduciaries on endless ESOP matters.