In making the determination as to whether an ESOP transaction is appropriate, we:
- Review the sponsor company’s and shareholders’ objectives including the need for liquidity, tax deferral, and value creation
- Analyze the financial condition of the company such as growth prospects, profit margins, operating history, customer concentration, and cash flow
- Estimate the equity value of the company in an ESOP buy-out scenario
- Determine the optimal capital structure for the transaction
- Analyze the debt service capacity of the company and the market for the required financing
