How To Explain A "Private Equity - Funded Sale-To-ESOP” To Your Clients & Keep Them Forever

Learning Objectives

• To learn how the two types of transactions compare and contrast such that you’ll be able to explain it to your clients.
• To understand how an outside funded SALE-TO-ESOP transaction compares to a traditional private equity sale transaction and the flow of funds in the former.
• To learn how the two types of transactions compare and contrast such that you’ll be able to explain it to your clients.

Course Description

Private equity firms have acquired an average of 4,000 of the approximately 100,000 companies in America with at least 100 employees each year since the early 1990s. It is reasonable to infer from these numbers that 30% to 40% of private companies with at least 100 employees are now owned by secular private equity firms focused exclusively on profit. This trend will continue for demographic reasons as Baby Boomer private business owners reach retirement age.

CPAs are losing clients when they sell out to private equity firms; it's difficult for CPAs to retire at the same time their clients are doing so. Historically, SALE-TO-ESOP transactions are not as attractive as the client selling out to an outsider because the ESOP didn’t deliver the same amount of cash at close. Now the same amount of cash at the close is available when selling to an ESOP, so more clients will be attracted to this Exit and succession transaction. 

With an equal depth and breadth of experience across the three most common liquidity events and leveraged finance generally, Brandt Brereton offers comparative education, advice, and execution to owners struggling with the tension that exists between perpetuating the ministry impact of the business and the need for it to receive outside capital for either shareholder liquidity or growth.  

Major Topics Covered:

• How a typical private equity buyout of your client works and 
• How it compare to the client instead of selling to an ESOP with a new source of liquidity to tap into a “PESOP Sale” instead
• What the flow of funds looks like in a “PESOP Sale”
• Why your client will prefer PESOP Sale and be your client forever rather than due to a 3rd party buyout
• What clients are best suited for a PESOP sale
• What the disadvantages of the ESOP structure are

You are welcome to attend this CPE webinar to learn more about "PRIVATE EQUITY - FUNDED SALE-TO-ESOP" and how to keep your clients updated and retain them for a lifetime.

Overview

• Private equity vs. ESOP Plus perpetuate structured equity

  5 mins
• Client retains control & You retain client

  9 mins
• How does this perpetuate capital financed, junior death fund financed, transaction work lease option etc?

  14 mins
• The ESOP strike zone

  38 mins
• Disadvantages of the ESOP

  40 mins