April 2014 Web Extra: Example ESOP feasibility analysis


Prior to implementing an employee stock ownership plan (ESOP), S and C corporations must undergo a feasibility analysis to determine whether the company is financially qualified to do so.

In hand with this month’s cover story, “Ownership pride,” CCG Advisors provided an example feasibility analysis for a company seeking to implement a leveraged ESOP. In this example the company is a 30-year-old firm owned by a single founding shareholder. The shown earnings are $2 million before interest, tax, depreciation and amortization (EBITDA). The company’s valuation for the ESOP sale is $10 million, or five times current EBITDA.

LM Staff

LM Staff

Landscape Management's staff brings together collective experience in journalism, research, writing, and editing. Our team stays tapped into the pulse of the industry, covering a wide range topics with a commitment to delivering compelling stories and high-quality content.

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