How to Get Started With Selling to an ESOP

An ESOP is a qualified retirement plan that invests primarily in the sponsoring employer’s stock. In addition to providing retirement benefits for employees, an ESOP can be used as an exit or liquidity vehicle for the owner(s) of the company and provide tax benefits to the company and selling shareholders.

How is an ESOP created?

To set up an ESOP, a retirement plan and trust fund is established. The shares of the company are sold to the ESOP trust via a negotiated process that considers the agreed upon fair market value of the company and other relevant deal terms. The terms of the ESOP plan document govern the allocation of shares within the ESOP trust.

How BDO Can Help

BDO’s ESOP Advisors have a wide range of experience in investment banking, tax, valuation, employee benefits consulting, ESOP administration, and commercial banking, including representatives in our wholly-owned investment bank, BDO Capital Advisors, LLC.

Our ESOP services include: 

  • Feasibility, valuation and tax analyses
  • Capital raising for leveraged ESOPs
  • Benefit plan design and analyses
  • M&A comparative analyses
  • Tax and accounting
  • Plan administration and compliance


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ESOP Case Study

The Challenge

A construction company owner was looking for an exit strategy that would maintain his legacy and continue to reward valued employees.

The Solution

BDO acted as the exclusive financial advisor and facilitated the company’s transition to a 100% employee-owned company.

The Outcome

The company and selling shareholders received tax benefits from the sale and the company’s employees gained meaningful retirement benefits.

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BDO is proud to be an ESOP company

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Now that BDO is an ESOP company, our longstanding experience as trusted advisors is enriched with insights gained during our firsthand experience with the ESOP process. This dual perspective allows us to draw meaningful parallels and offer more nuanced guidance to companies considering an ESOP.

Blake Head, Managing Director & ESOP Services Leader, BDO Capital Advisors

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Investment banking products and services within the United States are offered exclusively through BDO Capital Advisors, LLC, a separate legal entity and affiliated company of BDO USA, P.C., a Virginia professional corporation and national professional services firm. For more information, visit www.bdocap.com. Certain services may not be available to attest clients under the rules and regulations of public accounting. BDO Capital Advisors, LLC Member FINRA/SIPC