Advisory Basics
We structure the ESOP,
get financing, and invest
If you are not looking to be acquired, we advise company owners on an ESOP structure. You might be considering selling your firm to management or passing the firm to your family. You just might be looking for alternative options.
MBO is a launching pad for privately owned firms that are contemplating various exit strategies. To accomplish a successful exit, we focus on selling your firm to your employees via a leveraged ESOP. Head to head, at the same valuation, you will earn more money selling to your employees via an ESOP because of the tax benefits.
MBO can provide mezzanine debt to assist you in your leveraged ESOP.
Structuring Your Deal
Besides being great for employees, a properly structured ESOP offers an owner significant tax advantages. (See our 1 minute video on ESOP Basics)
The goal is for your company to pay little or no taxes on an ongoing basis, and for you, as the owner, to cash out of your company (partially or wholly) and defer your taxes on the sale. If structured properly, you can defer capital gains until your death, at which point the capital gains disappear for your heirs (In accounting terms, this is called a Step Up in basis).
MBO works with its partners to provide you with experienced, intelligent solutions – from valuation to arranging financing to Closing. We work with top investment banks, brilliant CPA’s and experienced tax attorneys that will work to maximize your returns.
Arranging Financing
For capital raising, we use our partner network to do the following:
- Determining the amount and type of capital to be raised
- Preparing confidential memorandums for the lenders
- Establish tax advantaged financing terms Contacting our extensive network of private capital sources
- Negotiating the final size and terms of the financing
MBO’s partners have raised billions of dollars for clients. We will get your ESOP financed.
MBO will also invest in your firm.
MBO Will Invest in Your Firm
- Owners seeking to do a 100% ESOP sale
- Owners seeking to do a minority sale to the ESOP
- Working with family-held businesses to “pass the torch”
- Backing managers seeking to create a Management Buyout (MBO)
- Buying out shareholders who are seeking an exit
- Fundless sponsors looking to do acquisitions
- Allows owners to get liquidity
- The ESOP structure allows the owners to defer taxes on the sale (take home cash is more than a straight Private Equity deal)
- Huge tax savings for the company
- Increased cash flow for the company
- You maintain upside in the business through an investment using subordinated debt and warrants
Contact Us
Contact us if you have any questions.
We’re easy to reach and always happy to help
We invite you to call us with any questions you have or email us by filling out the form below. No question is too big or too small – whether you have a question about MBO Ventures or a question about ESOPs.
dgleeman@mboventures.com
Partner Phone: (646) 734-2035