ESOP Structuring & Financing: Anticipating & Avoiding Obstacles

Do ESOP transactions ever fail to close? Absolutely. ESOP transactions are not that dissimilar to M&A transactions in that both transaction types may stall as a result of various issues including valuation gaps between the buyer and seller, the inability to obtain desired financing, and other external factors. Still, the obstacles that arise during the structuring and negotiating of an ESOP transaction are generally not insurmountable. With the guidance of experienced ESOP professionals, most concerns can be resolved or avoided through proper planning and communication. Anticipating the common obstacles that arise during the structuring and financing of an ESOP transaction eliminates surprises and invariably smooths the process while saving transaction expenses.

Richard Shuma is a Managing Director at Prairie Capital Advisors, Inc. He can be contacted at 630.413.5598 or by email:

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