Our Work

Case Studies

On day one, we promised these clients that our designs would never utilize off-the-shelf solutions and that their succession designs would be unique to them.

Industry

Case Study

Steel Manufacturing

$690MM

Company Valuation

$380MM

ESOP Transaction Value

Capital Gains Tax

$90MM

MSOP Team Value

Like many entrepreneurs, the owner of this Sub S corporation (appraised at 690 MM), wanted his exit strategy to accomplish many things: (1) reap a personal financial reward; (2) perpetuate his company; (3) reward loyal employees (4) and provide his young children with a lifetime income that has little or no tax obligation. CTC converted the company's Sub S to a C-Corp., sold 55% of the company to an ESOP Trust and implemented a QRP hedged in a proprietary manner to accomplish all the stated objectives. The ESOP Transaction value was $380 MM; the ESOP Transaction value stands at $380MM. With our plan, the entire $380 million tax is free of capital gains tax. Plus looking forward to the MSOP team worth $90MM when earned in five (5) years of meeting EBITDA projections.

Case Study

Home Mortgage

$150MM

Starting Valuation

$685MM

Final Valuation

$20MM

Bridge Loan Arranged

9 Months

Loan Repaid In

Over 90% of this privately held company was in the hands of five (5) owners. The remainder was held by 5000 minority owners. The company's senior execs were aging out, looking to reorganize in a stagnant market. CTC recommended that the company's 41% ESOP make a tender offer to buy the shares of minority owners, but the offer was unsuccessful. As the company was bleeding cash in succeeding months, CTC stood by its client, able to arrange a 20MM loan @5% interest. A year later, a second tender offer was accepted. The loan was paid off in nine (9) months (as the economy improved under a new administration); and the 150MM firm grew from 150MM to 685MM.

Industry

Industry

Case Study

Energy Services

$190MM

Company Valuation

Majority ESOP

Structure

Rejected

PE Sale Considered

Employee Benefit

Outcome

Shareholders of an energy services company valued at $190 million were exploring options to take some chips off the table, reward employees for hard work, attract more employees and benefit from growing the company in the future. They considered outside sale via PE buyers and found the prices offered were good. But soon realized this type of sale could not benefit employees and grow the business. CTC was brought in to consult -- to design a solution and prepare a Feasibility Study. After extensive due diligence, the company asked CTC to quarterback the transaction and implementation of an ESOP. A majority of the stock was sold to the ESOP to accomplish their goals for the benefit of the employees, and the minority was retained for future appreciation.

Case Study

Technology

Strategic Sale

Transaction Type

Existing

ESOP Status

5+ Years Salary

Employee Payout

Successful Exit

Outcome

A successful IT company with an existing ESOP was approached by a strategic buyer looking to buy the firm at a premium over the current stock price. But the buyer had never purchased an ESOP-owned company and was getting cold feet for fear of the unknown. The Board turned to CTC who had a reputation for helping dozens of ESOPs exit successfully. CTC was engaged on many fronts – buyer, ESOP trustee, management, legacy shareholders, and employees. Ultimately the deal was successful and the employees who had been with the company since the beginning of the ESOP were each paid over 5 years worth of salary into their ESOP retirement accounts.

Industry

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