Building Better Capitalism™

ESOP Recapitalization

Applied Economics has relationships with multiple capital providers. It may be prudent to refinance existing corporate debt, such as the business owners’ seller notes or warrants. The seller note may carry a high coupon, and a refinance would provide the noteholder full liquidity and the company’s debt burden may be decreased (e.g., lower interest rate).

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A few things we look for:

  • A profitable, successful company with attractive cash flows
  • A strong management team, preferably with equity incentives to remain with and grow the company
  • Seller notes and/or warrants held by an estate
  • Current debts that can be consolidated/refinanced which lowers the interest payments

A few things we do not look for:

  • Unprofitable, struggling businesses
  • Turnaround situations
  • Significant customer or supplier concentrations
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