Background Wheeler Services, Inc. is a commercial contractor specializing in building concrete foundations, slabs on grade, as well as vertical structural elements throughout the Southeastern United States. The owner wanted to continue working but was looking to ‘take some chips off the table’. He was also hesitant about selling his business to a third party and what that would mean for his business’ legacy and employees. The owner engaged AE to perform a feasibility study to explore what an ESOP would look like for his specific situation.
Background Using the feasibility study as a roadmap, AE worked with the owner to install a comprehensive ESOP that accomplished all of his goals. AE secured outside bank financing in connection with the transaction allowing the owner to receive 35% of the purchase price in cash, with the remainder in a 10-year seller note. As a result, the owner was able to secure and diversify his investments. The ESOP also provided the owner the ability to have a ‘second bite at the apple’ through the issuance of warrants (right to own stock in the future), and award senior managers with stock options. In summary, the ESOP transaction allowed the owner to secure his financial future, maintain the business’ legacy, reward his employees, maintain privacy, and continue to stay involved in the ownership and day-to-day operations of the business.