My partner and I were introduced to Ed by the owner of a major electrical construction company in NYC. He tailored the ESOP structure around our needs and arranged for a credit facility with a major bank that well exceeded our expectations. Great guy, no-nonsense and a true friend. I would highly recommend him, especially in the construction space.
I was introduced to Ed O’Brien by Dan Disano, the CEO of Axis Point and the chairman of YPO Metro. Ed helped my company to successfully complete a large ESOP transaction and also, negotiated a large syndicated credit facility with three major banks. Ed was engaged and held our hand until the deal was complete and he had made good on all his initial promises. I was very pleased with the process and he has my full endorsement.
I was introduced to Ed by one of his clients that he successfully closed an ESOP for. He did everything he said he was going to do in our initial meeting and exceeded our expectations throughout the entire sale process. He’s also been there for us post-closing to ensure that we have a great client experience. Great guy and a good friend….Highly recommend
I’ve worked with Ed on a number of ESOP transactions and my clients are all pleased with the results. He’s consistently structured transactions tailored around the needs of the selling shareholders and has delivered as promised on every transaction
I was introduced to Ed by the managing partner at my accounting firm in 2012. I initially sold 49% to an ESOP and subsequently sold another 31% in 2017 with warrants for a third bite of the apple. The company now operates as a tax-free entity in perpetuity and I could not be more pleased. Ed Counseled me throughout the process and continues to offer guidance on an ongoing basis.
I met Ed through the food industry partner at my accounting firm. He provided great advice on a number of complex business issues and successfully negotiated a large credit facility with a major bank that has its own food industry group. Aside from our business relationship, we developed a great friendship and spend a lot of time together. Honest, smart, and a very good guy. He has my full endorsement
Company Description: |
NYC based notable construction company with $600M in revenue. |
Corporate Structure: |
S Corp |
Ownership: |
Two 50% shareholders |
The shareholders sold 70% to an ESOP for $70M. The company redeemed the remaining 30% of the shares from the shareholders in exchange for a warrant package which will provide a significant second bite of the apple.
The company was converted from an S Corp to a C Corp pre-closing.
The company received $70M in corporate tax deductions which will shield the vast majority of the taxable income over the next several years
The shareholders received $30M cash at closing from a major bank on a nonrecourse basis to pay down part of the $70M seller note. The remaining $40M will be paid down on an annual basis through the excess cash flow of the company. The $40M remaining seller note bears an interest rate of 4%.
The selling shareholders elected section 1042 of the tax code which will defer/potentially eliminate capital gains tax on the $70M sale proceeds.
In 5 years, the company will convert back to an S Corp and become a tax-free entity (no federal/state) in perpetuity.
This illustration has been approved by the shareholders. There are a number of different ESOP structures that can be tailored around the needs of the selling shareholders. If you would like more information around the various ESOP structures, please contact Ed O’Brien at Eobrien@bluehippoesop.com