Most construction owners think they have four exit options. Pass it to a kid. Sell to an employee. Sell to a competitor. Sell to private equity. The reality is harder. Private equity passes on most contractors. Competitors often aren't buying. That's why ESOPs are now the fastest-growing succession trend in construction.
Kelly Finnell, CEO of EFS ESOP Consultants, has done 22 ESOPs for general and specialty contractors in recent years. In this episode, Kelly explains how the deal is actually structured, what the owner walks away with, and where most owners are wrong about "leaving money on the table."
What you'll learn:
Why construction is the fastest-growing industry for ESOPs in the country
The three sources of capital that fund an ESOP: bank loan, seller note, excess cash
How two contractors with $3M EBITDA sold for $25M to an ESOP after $12M offers from a strategic buyer
Why an owner is not personally on the hook for the ESOP bank loan
How to manage the repurchase obligation so it doesn't crush you in a down year
The first two moves to make if you're 58 and seriously considering this path
Connect with Kelly Finnell on LinkedIn: https://www.linkedin.com/in/esopcoach/
Kelly's Website: www.execfin.com
Kelly's Book, The ESOP Coach: https://www.amazon.com/ESOP-Coach-Ownership-Succession-Paperback/dp/B010CKUN9U
National Center for Employee Ownership: https://www.nceo.org/
Free Succession Planning Guide: https://www.constructiongenius.com/free-succession-planning-guide