Unlocking the value of your business Helping business owners understand their options

 

The Capital ESOP Group


phone

202-585-5358



phone

202-585-5329





address

UBS Financial Services Inc.
1501 K Street NW
Suite 1100
Washington, DC 20005



Exiting a business can be a time-consuming and often emotional process for an entrepreneur or business owner. It is important to have a team of professionals that you can turn to for help with any part of the exit process.

The Capital ESOP Group has helped business owners and their families create over $2 billion of liquidity. We follow a disciplined process when it comes to evaluating your options for transitioning your business.

We are equally focused on your post-liquidity needs. Our team provides holistic wealth management solutions, sophisticated tax and estate planning strategies, and targeted investment recommendations. Our process is intended to help preserve your wealth as you enter the post-liquidity life you’ve long envisioned for yourself and your family.

Keith Apton and Nick Francia have been recognized as industry leaders

Keith Apton

  • Forbes Best-In-State Wealth Advisors, 2018 – 2021 (Ranked #2 in Washington DC in 2020 and 2021)
  • Barron’s Top 1,200 Financial Advisors, 2014 – 2021 (Ranked #4 in Washington DC in 2021)
  • UBS Pinnacle Advisor, 2018 – 2021
  • Washington, DC’s Best Financial Advisors, as seen in Washingtonian magazine, 2016 – 2020
  • Financial Times Top 400 Advisors, 2016 – 2018
  • On Wall Street Top 40 Advisors Under 40, 2016, 2017
  • REP. magazine and WealthManagement.com Top 40 Wirehouse Advisors Under 40, 2014, 2015

Read more about
Keith’s experience

Nick Francia

  • Financial Planning Top 40 Advisors Under 40, 2021
  • Barron’s Top 1,200 Financial Advisors, 2021 (Ranked #13 in Washington DC)
  • Forbes Best-in-State Wealth Advisors, 2020, 2021
  • Forbes Best-in-State Next-Gen Wealth Advisors, 2019 (Ranked #1 in Washington, DC)
  • Forbes Top 250 Next-Generation Wealth Advisors, 2019
  • UBS President’s Council Advisor, 2019
  • Forbes America’s Top Next-Generation Wealth Advisors, 2018
  • UBS Top 35 Under 35, 2018

Read more about
Nick's experience

Monetizing your privately held business

Working collaboratively, we educate business owners on various ways to monetize their privately held business in a tax-efficient manner.

“Our goal is to educate business owners and their trusted advisors on tax- efficient exit strategies, enabling them to preserve and pass on the wealth they worked hard to create.”

— Keith Apton, Managing Director–Wealth Management

Expanding your business
When looking to expand or grow, we have access to experts that can help you manage your expansion, including private capital sourcing and public equity and debt financing.

Banking and lending services
We understand that, whether they are personal or business-related, liabilities can play a key part in a balance sheet if utilized correctly. Through UBS you can access banking and lending services such as securities-backed loans, unsecured loans, mortgages, credit cards, and more.

Selling your business
Our process offers detailed modeling, clearly illustrating what it would look like to sell to a strategic buyer, sell to a financial buyer, utilize a dividend recap or sell to an ESOP.

Succession planning
We create customized cash flow models comparing the economic benefits of a taxable installment sale and a tax-deferred sale to an ESOP using Section §1042 of the IRC.

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Our 7-step process

Making the ESOP decision

There are a number of ways to transition a business, all of which have their own pros and cons to the owner, the employees, and the company. When appropriate, we advise business owners on an Employee Stock Ownership Plan (ESOP) as an exit strategy. An ESOP allows business owners to monetize all or part of their business, maintain control, and avoid capital gains tax under the proper structure while simultaneously benefiting their employees.

Why consider an ESOP?

“For the right owner, an ESOP is a powerful, flexible, tax-efficient way to sell all or a portion of your privately held business.”

— Nick Francia, Managing Director–Wealth Management

Will you benefit from a tax-efficient liquidity strategy?
This tax-efficient exit strategy enables you to monetize the wealth created in your privately held business and defer or potentially eliminate the long-term capital gains tax triggered from the sale.

The ESOP transaction is employee-friendly
By linking employee benefits to company performance, the ESOP can be a strategic tool to create a culture that helps you retain and motivate your employees.

We offer additional services for ESOP-owned companies
Leveraging the depth and resources of UBS, we can help you manage your repurchase liability, administer your ESOP escrow accounts and help you analyze and implement the proper management incentive/NQDC plans for key employees.

Learn more

ESOPs: A tax-efficient exit strategy

A Guide to Employe Stock Ownership Plans

How to defer (or eliminate) capital gains tax in the sale of your business

ESOPS and estate planning after 2017 tax reform

Case studies
How we’ve helped business owners discover the benefits of an ESOP

There are numerous viable approaches to employ when selling your business, but we often advise business owners to consider if an Employee Stock Ownership Plan (ESOP) is the right tool for them. Here are three cases that relate how an ESOP worked effectively for our clients and their families, resulting in significant liquidity transactions.

Family matters

The situation
The clients were a husband and wife in their mid-50s and their two children. The couple had owned and operated a successful general contracting company in California for over 20 years. The owners had very different goals and could not agree on a succession plan. The wife wanted liquidity to protect the family’s lifestyle and legacy; the husband did not want to give up control of the business.

The strategy
At the request of the family’s CPA, Keith Apton and Nick Francia flew to California to work with the business owners and their CFO on ESOPs. The Capital ESOP Group created cash flow models illustrating what a partial ESOP transaction would look like. This allowed the business owners to decide what was best for them, their company and their employees.

The result
The couple realized that this strategy addressed both of their concerns: It would provide significant liquidity while still enabling them to retain control of the company and their legacy. They decided to sell 30% of their stock to an ESOP.

The ESOP structure helped them avoid capital gains tax on the sales proceeds, diversify their net worth and preserve their lifestyle. The family now has the flexibility to decide how they want to transition the remaining 70% ownership. They have the choice between an outright sale or gifting the equity to their children.

Download and share the printed version

The case study presented, based on actual client experiences as told by the Financial Advisors, is provided as an illustration and may not be representative of the experience of other clients. There is no guarantee of the future success of any of the strategies discussed.

Communications breakdown, solved

The situation
Our clients were five siblings who owned a cable, Internet and telecom services provider in the Northeast. The siblings could not agree on how to manage or transition the business. They tried to sell the company with the help of an investment bank over the previous five years, but had not found a deal that all of them would agree to.

The strategy
Anticipating the challenge of getting all of the siblings to agree, the family’s trusted advisor thought the flexibility of an ESOP might be worth exploring. Keith Apton and Nick Francia were brought in to discuss business succession planning, specifically ESOPs.

The owners were intrigued and wanted to learn more about how an ESOP would work for their specific circumstances. The Capital ESOP Group provided models comparing various transaction assumptions to help them understand the flexibility of an ESOP.

The result
The Capital ESOP Group helped the business owners sell 100% of their company to an ESOP, managing to make each of the siblings happy with the outcome. Five years prior, there was no indication that the five siblings would ever be able to sell their company without disagreement from at least one of them.

The flexibility of an ESOP allowed the family to create a structure that accomplished each of the siblings’ independent goals through a single transaction.

Download and share the printed version

The case study presented, based on actual client experiences as told by the Financial Advisors, is provided as an illustration and may not be representative of the experience of other clients. There is no guarantee of the future success of any of the strategies discussed.

Increasing the thread count

The situation
The client was an owner and operator of a textile manufacturing company in New York City. He had met with Keith Apton to learn about his various options to transition the business. While he was intrigued by the option of selling to an ESOP, the client and his advisors decided that the timing wasn’t right. However, a few months later, he was presented with an unsolicited offer from a strategic buyer.

The strategy
The owner’s financial advisor encouraged him to re-engage The Capital ESOP Group to analyze and model the different scenarios, helping to ensure that he received the best deal possible.

Keith Apton advised the business owner to run a dual-track process to simultaneously evaluate the ESOP transaction and the strategic buyer’s offer. This allowed him to directly compare the different scenarios and the possible outcomes for the family, the company and the employees. The Capital ESOP Group worked with a boutique investment bank that leveraged the tax- advantaged price of selling the business to an ESOP in their negotiations, ultimately leading the strategic buyer to submit a higher offer.

The result
The strategic buyer felt the pressure and made an offer that was over 30% higher than his original, unsolicited offer—and higher than the tax-advantaged price of selling to an ESOP. The owner accepted and closed the deal with significantly more liquidity than he would have received accepting the original offer.

Download and share the printed version

The case study presented, based on actual client experiences as told by the Financial Advisors, is provided as an illustration and may not be representative of the experience of other clients. There is no guarantee of the future success of any of the strategies discussed.

Think you may have a potential ESOP deal?

To start the conversation, reach out to Keith Apton at keith.apton@ubs.com or Nick Francia at nick.francia@ubs.com

Wondering about your life after the sale?

Discover how the Capital ESOP team can help you and your family with all your wealth management needs

Our office locations

Washington, D.C.
1501 K Street NW
Suite 1100
Washington, D.C. 20005

New York
1285 Ave of the Americas
18th Floor
New York, NY 10019

Our perspectives

Insights

Planning for the future

Selling your business: Proceed with passion

Creating your legacy

Creating a legacy that lasts