Leveraged ESOPs and Employee Buyouts, 6th Ed - Softcover

Gordy, Vaughn; Hawkins, Neal; Josephs, Mary; Merten, William; Miller, Rebecca; Rodrick, Scott; Rosen, Corey; Solimine, John

9781938220067: Leveraged ESOPs and Employee Buyouts, 6th Ed

Softcover

ISBN 10: 1938220064 ISBN 13: 9781938220067

Publisher: National Center for Employee Ownership, 2017

A leveraged ESOP borrows money to buy shares in the sponsoring company in order to buy a major part or even all of the company. It can be used to purchase shares from retiring owners in private firms, buy out entire companies, or finance new capital. With leveraging comes additional cost and complexity. This book discusses how ESOPs work and explains those complexities, providing comprehensive converage of ESOP financing plus chapters on accounting, legal rules, valuation, M&A, and the tax-deferred ESOP "rollover." In the sixth edition, the book has been extensively updated and enhanced. It now features vastly expanded coverage of the intricacies of ESOP transaction financing (including seller financing), plus updates and additions to existing material on legal, valuation, and accounting issues.

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From the Publisher:

The National Center for Employee Ownership (NCEO) is a private, nonprofit membership and research organization that serves as the leading source of accurate, unbiased information on employee stock ownership plans (ESOPs), broadly granted employee stock options and related programs, and ownership culture. We are the main publisher and research source in the field, hold dozens of workshops and conferences annually, and provide services to our thousands of members. This book, which includes the changes to ESOP rules enacted in June 2001, is a guide to the complex issues involved in using an ESOP for a leveraged buyout.

From the Back Cover:

During the past few decades, employee stock ownership plans (ESOPs) have become a familiar feature on the U.S. business landscape. There are currently over 11,000 companies with ESOPs; many of these ESOPs are leveraged, meaning that the ESOP has borrowed money on the credit of the employer or other related parties to buy company stock. It is the only qualified employee benefit plan that can do this. Moreover, the company can deduct ESOP contributions it makes for both principal and interest payments on the loan. This tax-advantaged leveraging capability makes the ESOP an ideal vehicle for several purposes, including buying out a company; divesting a subsidiary, division, or product line; enabling a public company to repurchase shares; restructuring existing benefit plans; and acquiring capital with a low-cost loan.

A leveraged ESOP can be the ideal vehicle for an employee buyout. In the past few decades, thousands of companies have been established through selling a company to an ESOP or through corporate divestitures to newly created companies that are at least 25% ESOP-owned.

ESOPs are complicated mechanisms, and using leverage increases that complexity. This book is designed to be a practical tool for anyone dealing with that complexity, whether the leveraged ESOP will purchase a small amount of stock or be used for an employee buyout of part or all of a company. Business owners, managers, their advisors, and others interested in employee ownership plans will all find this book helpful.

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