Making investments in ESOP companies
Since 2017, New State has converted two portfolio companies, Gautier Steel and Klein Hersh, to ESOPs. These companies were both well-suited to benefit from the alignment created through employee ownership as well as the tax benefits which drive improved free cash flow and value creation.
Each of these transactions provided New State the opportunity to work with the nation’s leading ESOP advisory groups related to legal, tax, governance, and valuation services. Armed with these capabilities, New State is actively making investments in ESOP companies with the following characteristics:
- Business services, industrial services and consumer companies with >$8M in TTM EBITDA
- Strong management teams committed to long-term growth
- Growing end markets with limited customer concentration
New State will invest in a variety of ESOP situations, including the following:
- Mature ESOPs seeking capital for growth and/or acquisitions
- Financing for newly formed ESOPs
- Purchase of structured equity from existing ESOPs
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