ESOP Feasibility Study

ESOP TRANSACTION AND GUIDANCE: ESOP FEASIBILITY STUDY

The decision to adopt and implement an employee stock ownership plan (ESOP) requires careful analysis and teamwork. While ESOPs provide numerous benefits to various types of entities, there are many issues to consider when deciding to make the transition. An ESOP feasibility study addresses these matters and helps determine if an ESOP is right for your company and if it will help you accomplish your desired goals—such as creating a business succession plan, offering employees another retirement benefit, or achieving diversification.

The purpose of an ESOP feasibility analysis is to give the selling shareholder(s) the financial information needed to determine whether to move forward with an ESOP transaction. Further, the results of the feasibility study enable the selling shareholder(s) to propose a structure to the ESOP Trustee and their team.

ESOP Feasibility Study Services

Our ESOP advisors assess and analyze many factors and take both a technical and logical approach when preparing an ESOP feasibility study. We focus on:

Identifying the goals and objectives of the seller
Preparing financial modeling based on projections
Assistance with financial projections
Assessing the historical financial results
Gaining an understanding of the company’s financial history
Determining the impact of an ESOP on other qualified retirement plans in place (i.e. 401(k) plans)
Reviewing future eligible compensation
Assessing senior debt capacity and financing options

After reviewing these components and learning more about the company and its current status, our advisors prepare an ESOP feasibility study that includes an overall recommendation on whether to implement an ESOP through management interviews and detailed financial models and projections. The study also provides ways that an ESOP can be designed to offer the most benefits for your company and the selling shareholder(s).

additional esop feasibility study services

In addition to the study, we provide:

Projected 409(p) analysis
Projected cash flow analysis
Assistance in developing the structure of the transaction
Consulting related to the balance of lender financing and seller financing
Providing an indication of the value of the company

Because the decision to adopt and implement an ESOP is an important choice, you want a trusted and expert opinion on the matter. Allow us to help you make this significant decision and provide you with the answers you need to accomplish your company’s goals.

See our ESOP page to understand how our services are unique.

Fill out the form below to request an analysis today and we will contact you in regards to next steps in working with our professionals on your ESOP feasibility plan.