ESOP Transaction Timeline

The estimated timeframe to complete and ESOP transaction is appropriately 4 to 5 months

Feasibility Phase

3-4 Weeks (3-4 Weeks Total)

  • Collect and analyze historical and projected financial information.
  • Build a financial model and estimate the preliminary valuation range.
  • Prepare debt capacity analysis and explore possible transaction structures.
  • Determine if an ESOP is a viable option.

Feasibility study, which includes a valuation range, debt capacity analysis, suggested structure, and analysis of future cash flows.

Preparation Phase

6-8 Weeks (9-12 Weeks Total)

  • Receive additional company information.
  • Apply changes to the proposed structure based on received feedback.
  • Build annual and monthly financial models for valuation and financing purposes.
  • Synthesize information in a memorandum.

Confidential Information Memorandum (“CIM”) highlights the company’s strengths and discusses the mitigants to investment risks.

Indication Phase

5-6 Weeks (14-18 Weeks Total)

  • Help management interview independent trustees.
  • Provide confidential information memoranda to the trustee and trustee’s financial advisor.
  • Provide confidential information memoranda to financial institutions.
  • Solicit term sheets from financial institutions.

Indication of interest from an independent trustee representing the participants and term sheets from financial institutions.

Implementation Phase

6-7 Weeks (20-25 Weeks Total)

  • Address information requests during the due diligence process.
  • Negotiate transaction terms with trustee and financing terms with selected lender.
  • Coordinate the transaction process.
  • Review transaction and financing documentation and close transaction.

Executed regulatory filings and transaction documents.

Our team is qualified to run a parallel sale process for those clients considering both an ESOP and sale to a strategic or a financial buyer.

If a client elects to keep his/her stock in the company but wishes to create a liquidity event, we use our network of capital providers to raise debt to finance the leveraged recap and negotiate the terms and conditions of the new debt facility.