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ESOPs and Metal Construction

Paul Deffenbaugh

Business owners who have recently nursed their companies through the recent downturn are now beginning to pick up their heads and think about exit strategies. Especially those of a certain age.

Many will turn to the next generation, passing along not just a legacy, but a future and economic value. I call this genetic equity. But many others, who don't have children interested in the business or are looking to use the value they've created over a lifetime of building a business, are looking for a liquidity event that will give them a nest egg for retirement.

In construction, Employee Stock Ownership Plans (ESOPS) have always been a popular method for passing along a business and avoid the dreaded possibility of selling off the assets, covering the debts and shuttering the operation. It makes sense.

One of our peers in the metal construction industry, Central States Manufacturing Co., Lowell, Ark., recently went through an ESOP and Mary Joseph, CEO of Verit Advisors--a company that specializes in ESOPs--wrote about it on the Forbes magazine website. Check out the article The Millionaire Truck Driver and Other ESOP Miracles.

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