ESOP Advisory

Is an ESOP right for you?

An Employee Stock Ownership Plan (ESOP) allows employees who work at the company to become owners and share in the company’s success overtime. Current owners sell their business to a trust that is created to control the company on behalf of employees, who become shareholders.

Owners who consider an ESOP want to reward their employees while also receiving fair value for the business they worked to create. It is natural for owners to want to protect their employees and the legacy they built. An ESOP sale does just that: it allows the owner to protect their brand and allows employees to maintain the owner’s legacy.


ESOPs are a great fit if you want to sell, but wonder:


  • Will my employees be taken care of and rewarded under new ownership?

  • Will the legacy and brand of the company live-on?

  • Will our customers continue to receive the same high-quality service?

  • Will my business continue to make the same positive impact in the community?

Our Approach

  • 1. Conduct due-diligence and prepare a valuation to get ahead of any potential issues or risks under an ESOP structure.

  • 2. Mitigate any risks to the transaction (management compensation expectations, financial health of the business, availability of debt financing).

  • 3. Put together the full team of internal and external stakeholders (internal management, CPA, bank financing partner, legal).

  • 4. ClearPath quarterbacks the process and protects you at every stage, including negotiation for debt placements, and negotiation with the transactional trustee.

  • 5. Ongoing support post-close support with the trustee.

Parallel Path - ESOP and Sale Process

A Parallel Path is a combination of an ESOP transaction while also exploring options with third parties. ClearPath uses the value from an estimated ESOP transaction as a baseline of what is acceptable for an M&A sale. Our team works on the sale and ESOP processes at the same time to reduce delays, while leaving you in control for as long as possible.

A parallel path allows business owners to compare:

  • after-tax proceeds
  • fit with potential buyers
  • ongoing involvement
  • impact on management while providing an additional negotiating tool with potential third-party buyers



Our Track Record

ClearPath Business Advisors believes that business owners should build a healthy, sellable business whether they plan to sell or not.

As former CEOs, CFOs, and other executives, we understand the levers that drive value for businesses, and the obstacles that get in the way of increasing that value. When combined with our significant M&A transactional expertise, we provide an outside investor’s point of view.

Your path to a healthy, sellable business is waiting for you. Let’s walk it together.