Every business owner reaches a time when they want to develop a plan to unlock the value they have built in their business. In many cases, the company is the largest, most valuable property they own and represents a significant concentration of investment risk in one asset. Prudent retirement planning calls for diversification and a need for the business owner to harvest the value they have created in their business to invest in a broader portfolio of investments. Often when we think of harvesting the value in a business, we think of a major shareholder transition transaction. A shareholder transition can be accomplished through the sale of the company to a strategic buyer, a private equity fund or an Employee Stock Ownership Plan (“ESOP”). While these are all commonly used, successful methods to achieve shareholder liquidity there are times when another alternative should also be considered.
Terrel Bressler is a Managing Director at Prairie Capital Advisors, Inc. He can be contacted at 312.348.1323 or by email: email@example.com.