Dual-Track processes involve simultaneously structuring an ESOP Buyout Transaction and conducting an M&A sale process. Dual-Tracks are unique to AmbroseAdvisors as one of the only providers of both services bundled together in a single transaction process.
Simultaneous ESOP Buyout and M&A Sell-Side Advisory
Dual-Track M&A
AmbroseAdvisors utilizes the estimated ESOP transaction value as a near-certain backstop to the M&A sale process. Our team simultaneously initiates sale and ESOP processes to efficiently utilize management resources, perform due diligence and approach the market, while maintaining optionality for as long as practicable.
This allows business owners to evaluate the following aspects of both transactions: after-tax proceeds, fit with potential buyers, ongoing involvement & impact on management while providing an additional negotiating tool with potential third-party buyers.
- Transaction structure designed to create liquidity for shareholders in the most tax-efficient manner possible
- The Dual-Track process allows sellers to evaluate multiple exit alternatives and equips them with the most complete information they need to choose the best sale solution
- Ownership transition plans established up-front between Buyer and Seller
- The Dual-Track process provides sellers with a comparison of upfront cash proceeds; an important consideration for any seller
- Dual-Track Processes are highly confidential and require detailed non-disclosure agreements executed between Buyer and Seller to minimize risk of employees, suppliers or customers learning of a transaction prior to close
- Dual-Track processes are focused on presenting business owners a comparison of exit alternatives and highlighting key differences in upfront cash, after tax sale proceeds, corporate income taxes, ongoing management of operations, and overall benefits to sellers
The Dual-Track Advantage Simultaneous ESOP Buyout and M&A Sell-Side Process
| Strategic Buyers | Financial Buyers | ESOP Trustee | Result | |
|---|---|---|---|---|
| Competitors | O | O | X | Competitors typically approach a limited number of Buyers / may not receive any offers… |
| AmbroseAdvisors | O | O | O | Ambrose utilizes ESOP transition option and value as a near-certain backstop to the M&A sale process |
Competitors
Strategic Buyers O
Financial Buyers O
ESOP Trustee X
Result
Competitors typically approach a limited number of Buyers / may not receive any offers…
AmbroseAdvisors
Strategic Buyers O
Financial Buyers O
ESOP Trustee O
Result
Ambrose utilizes ESOP transition option and value as a near-certain backstop to the M&A sale process
Coordinated Team of Professionals
The Ambrose M&A Advisory Approach
Both M&A and ESOP buyout transactions require a coordinated team of professionals including an investment banker like AmbroseAdvisors, the Seller’s CPA, Seller’s legal counsel, Seller’s wealth manager, insurance providers, Buyer’s CPA, Buyer’s legal counsel and third-party lenders.
- Investment Banking Valuation analysis, deal marketing, projection modeling, synergy analysis, transaction structuring, soliciting proposals, negotiations, leading the transaction execution, resolving open issues, reviewing all documentation, transaction schedule coordinating, funding and closing. If an ESOP is chosen we also assist with the placement of debt to finance the upfront payment in the ESOP transaction.
- Transactional Support Managing due diligence, transaction negotiations, build-out an e-data room, selection of transaction insurance. If an ESOP is chosen we also assist with interviewing and selecting the ESOP Trustee (buyer) and managing the ESOP Trustee Team through the transaction’s closing.
