Concrete Construction Company

Background

Specialized C-8 concrete contractor
High quality concrete foundation construction for tract home builders, custom home builders, and commercial general contractors
S Corporation with approximately 530 employees
Company value $28,000,000
4 shareholders, no family members involved in the business

Goal

Solution

Establish an ESOP
All shareholders will sell 100% of their stock to the ESOP
In exchange for selling their stock sellers will receive cash and seller notes
$1,500,000 down payment from Company cash to use towards paying down the shareholder Accumulated Adjustment Account balances
Balance of AAA and stock sale will be funded by seller notes

Benefit to Client

15 year seller notes totaling $26,500,000
Life of loan interest of approximately $4,900,000
Shareholders received Warrants to divide between seller note holders
At the end of the seller note period the projected value of the Warrants is estimated to be $14,600,000
As a 100% S Corp ESOP owned company, 100% of future profit will not be taxed from that point forward
Over the next 15 years the corporate tax savings are estimated to be over $52,000,000

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