Post ESOP - Maximization
Your ESOP transaction is complete. Congratulations! What happens next?

 

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What’s next? You sold your company, you’re wealthy, and so what do you do now?

This change in ownership comes with a new reality of running and ESOP, and we are here to assist with this phase to ensure the first 6 months to one year go smoothly.

One or more owners have exited the business. Hopefully, debt was raised and selling shareholders received a lump sum, which helped to create immediate cash-in-hand wealth. 

How do you handle this money both from a financial planning standpoint and a personal values standpoint?

Did you elect 1042 treatment to defer and possibly avoid taxation?

What will you do with your wealth? 

What goals do you have for it?

Legacy Press Ventures knows part our success is in life after ESOP. We strive to help you, your employees, and your company navigate after selling.

Learn More About ESOPs in Our Blog

While we are thrilled for you, we also think supporting your management team and your employees is crucial at this juncture. The management team will have significant wealth creation outlined via a management incentive plan (MIP), and we want to accelerate the progress of obtainment of the goals associated with the MIP.


The design of the MIP can occur pre- or post-transaction, and there advantages to both. Additionally, now that the organization is a tax-free entity, how is the pay down of the bank debt (or pay out of seller notes) going to flow?


Post-transaction, selling shareholders are typically holding seller warrants that are exercisable after all seller debt is cleared from the company. The value of these warrants is directly tied to company valuation, which will grow exponentially as debt is cleared. In some cases of strong growth, the value of the seller-financed warrants can outpace the value of the initial transaction.


We would like to partner with you during these phases to ensure your transition is smooth and that everything accelerates as the company moves into the ESOP world of operation.


Finally, for owners that are existing, there is typically a significant psychological adjustment. We dig into this fairly extensively here, and we have an assessment we offer to help you on your personal journey of transition out of company operation and ownership.