BTA HEADQUARTERS 17712 NE Cole Witter Rd | Battle Ground, WA 98604

Pharmaceutical

Background

Goal

Retain operational control of the company for the foreseeable future
Cash out small independent shareholders
Start estate planning and provide liquidity for majority shareholders (family)
Terminate defined benefit plan and use ESOP to supplement
Allow the company to continue to meet its business and operating goals
Continue to provide above average benefits to employees

Solution

Established an ESOP to meet company shareholder and family goals
Established estate plan for selling shareholders
Met with individual shareholders to get everyone on board with selling stock (35 shareholders to 5)
Setup preferred stock with dividends
Obtained senior lender financing for transaction
Terminated defined benefit plan and created safe harbor under ESOP for 401k match

Benefit to Client

Provide liquidity to owners and non-employee shareholders
The ESOP provided approximately $16,500,000 in initial tax benefits
The total cost of using an ESOP vs. a non tax advantaged option is $32,000,000 vs. $55,000,000
Allowed owners control of the board of directors for the foreseeable future
Cost effective way to remove the defined benefit plan
Allows the employees to benefit from the growth and value of company stock

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