• Valued at $125 million
  • Approximately 300 employees
  • Company has been involved in the pharmaceutical industry since 1954
  • Specializes in prescription medical food products marketed and sold nationally


  • Retain operational control of the company for the foreseeable future
  • Cash out small independent shareholders
  • Start estate planning and provide liquidity for majority shareholders (family)
  • Terminate defined benefit plan and use ESOP to supplement
  • Allow the company to continue to meet its business and operating goals
  • Continue to provide above average benefits to employees


  • Established an ESOP to meet company shareholder and family goals
  • Established estate plan for selling shareholders
  • Met with individual shareholders to get everyone on board with selling stock (35 shareholders to 5)
  • Setup preferred stock with dividends
  • Obtained senior lender financing for transaction
  • Terminated defined benefit plan and created safe harbor under ESOP for 401k match

Benefit to Client

  • Provide liquidity to owners and non-employee shareholders
  • The ESOP provided approximately $16,500,000 in initial tax benefits
  • The total cost of using an ESOP vs. a non tax advantaged option is $32,000,000 vs. $55,000,000
  • Allowed owners control of the board of directors for the foreseeable future
  • Cost effective way to remove the defined benefit plan
  • Allows the employees to benefit from the growth and value of company stock