EP 170: Insights into ESOP

Kevin Lawton

In this episode, I was joined by Nathan Perkins of CSG Partners who focuses on ESOP. This is the latest in our partnership with Material Handling Wholesaler for the May 2021 issue. Nathan wrote the cover story entitled “Dealers at a Crossroads – Choosing the Right M&A Transaction” and we discuss how material handling dealers did throughout the pandemic and how they are now dealing with coming out of the pandemic. He also explains what an ESOP is and why this could be a good choice for a company.

Key Takeaways

• Nathan and CSG Partners focus specifically on ESOP transactions and also work with a lot of material handling companies to help navigate this type of deal. ESOP stands for Employee Stock Ownership Plan which means that the employees take ownership in the company through the owner issuing stock. The owner can sell all or partial amounts of the stock and it is a way for them to get liquidity out of the company but still preserve the company as they know it.
• With the pandemic occurring over the last year, Nathan discusses how material handling dealers have done throughout the pandemic and they have fair pretty well according to him. Additionally, some have seen increases in business due to the increase in work throughout the warehousing and logistics space. Now as we come out of the pandemic these dealers are holding strong as well which is good news for the industry.
• We also discuss the driving factor behind the interest in mergers and acquisitions lately. Initially, my thought was due to the pandemic but Nathan explains that there is high interest right now so owners are trying to take advantage of that while there is a window of opportunity. Additionally, we discuss how many owners are getting to the age of retirement and also how there is a need for younger individuals to become interested in the space. With the supply chain coming to the forefront during the pandemic hopefully, we can get more interest from younger professionals in the supply chain space.

Listen to the episode below and leave a comment if you have experience with an ESOP.