ESI Equity Assists Clients in Many Ways as Their Businesses Change
Following are a few examples of how ESI has assisted clients with their business needs.
ProblemIn contemplating a merger, two companies in similar lines of business needed to determine if combining forces made sense.
ESI developed a value for each independent company as well as the projected combined company. This process included identifying the structural and operational needs of the new company formed by the merger. All applicable values were utilized to determine the equity allocation for each shareholder.
ProblemA company needed to determine the fairness of an offer from a third party to be acquired.
The ESI Team was able to assess the reasonableness of the offer and recommended a purchase price based on similar privately-held companies, allowing the management team to negotiate from a position of strength.
ProblemThree companies needed assistance to ensure an equitable division of ownership after a planned merger. The companies and their owners had diverse holdings, and disagreements over value allocation threatened to delay the merger.
ESI provided an objective valuation for each individual company to determine equitable distribution of ownership in the newly formed company. All parties were confident in the process and conclusion resulting in a successful merger.
ProblemThe sole owner of a large construction firm was looking to retire, but didn’t know what exit strategy would best suit his circumstances.
ESI helped the owner define his business goals and provided objective guidance on the pros and cons of various exit strategies. Based on the timing of his anticipated retirement, the competitive environment, and a consideration of all tax consequences, the firm installed an Employee Stock Ownership Plan (ESOP) and developed senior management incentives to retain its loyal employees for business continuation.
ProblemThe company’s board of directors presented an offer to the ESOP trustee to determine if it made sense to sell one of its divisions and what impact that would have on the Company’s value.
After assessing the offer and modeling the future cash flow of the Company with the remaining divisions we were able to provide direction for the trustee in its decision making process.
ProblemAs ESOP Company needed assistance projecting its future stock price to help with its repurchase obligation planning.
After collaborating with the management team on its forecast, we were able to assist the trustee and management team in modeling what the future share value would be over the next ten years. This was used to set in motion a strategic plan to handle its retirement benefit level and long-term repurchase obligation.