Background

• Specialized C-8 concrete contractor
• High quality concrete foundation construction for tract home builders, custom home builders, and commercial general contractors
• S Corporation with approximately 530 employees
• Company value $28,000,000
• 4 shareholders, no family members involved in the business

Goal

• Shareholders are looking for an exit strategy within 7 years
• Eliminate corporate taxes

Solution

• Establish an ESOP
• All shareholders will sell 100% of their stock to the ESOP
• In exchange for selling their stock sellers will receive cash and seller notes
• $1,500,000 down payment from Company cash to use towards paying down the shareholder Accumulated Adjustment Account balances
• Balance of AAA and stock sale will be funded by seller notes

Benefit to Client

• 15 year seller notes totaling $26,500,000
• Life of loan interest of approximately $4,900,000
• Shareholders received Warrants to divide between seller note holders
• At the end of the seller note period the projected value of the Warrants is estimated to be $14,600,000
• As a 100% S Corp ESOP owned company, 100% of future profit will not be taxed from that point forward
• Over the next 15 years the corporate tax savings are estimated to be over $52,000,000