Managers and employee groups periodically
get a "chance of a lifetime" when their company's
shareholders or board of directors offer the opportunity to
buy the business they manage. After the initial excitement wears
off, the reality of the complexity of the process begins to
set in, especially since you still have to operate the business.
This is where we can help.
Kent Group advises management teams and employee groups in the
acquisition of a company, product line, business unit, subsidiary
or division. We work closely with the management team to analyze
the opportunity, determine the proper value, negotiate the transaction
and, after a letter of intent has been signed, Kent Group will
arrange the debt and equity financing necessary to close the
transaction. Our ability to work with the management team throughout
the entire process, vast transactional experience in the agribusiness
and food industries and our skill in determining and defending
business values allows us to effectively negotiate the best
pricing and terms possible. As an effective facilitator, we
ensure an efficient and seamless transaction that can be readily
financed.
An Employee Stock Ownership Plan (ESOP) is another tool that
can be utilized by employee groups when acquiring a company
or business unit. An ESOP is an employee benefit plan allowing
the employees to become owners of their company. One feature
making an ESOP unique is its ability to borrow lower cost capital.
Consequently, an ESOP can use financial leverage to acquire
company stock, which can result in tax benefits to the ESOP's
corporate sponsor.
While establishing an ESOP is complicated, it should not discourage
interested companies and their existing shareholders from investigating
employee ownership as an exit or corporate finance strategy.
ESOP transactions can result in substantial benefits to existing
shareholders, such as increased employee motivation, a market
for existing shares, and income tax advantages on shares of
stock sold to the ESOP. Kent Group will help you understand
and manage the process.
