TRAINING AND EDUCATION FOR EMPLOYEE BUYOUTS - PowerPoint PPT Presentation

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TRAINING AND EDUCATION FOR EMPLOYEE BUYOUTS

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TRAINING AND EDUCATION FOR EMPLOYEE BUYOUTS Dan Bell (dbell_at_kent.edu) OHIO EMPLOYEE OWNERSHIP CENTER Kent State University FIFTH EUROPEAN MEETING OF EMPLOYEE OWNERSHIP – PowerPoint PPT presentation

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Title: TRAINING AND EDUCATION FOR EMPLOYEE BUYOUTS


1
TRAINING AND EDUCATIONFOR EMPLOYEE BUYOUTS
Dan Bell (dbell_at_kent.edu) OHIO EMPLOYEE OWNERSHIP
CENTER Kent State University
FIFTH EUROPEAN MEETING OF EMPLOYEE
OWNERSHIP Brussels 16, 17, 18 June 2005 European
Federation of Employee Share Ownership
2
About the OEOC Since 1987
  • Assisted 485 companies, 93,000 employees
  • Results 71 firms employing 14,000
  • Cost to Taxpayers 250 per job
  • http//dept.kent.edu/oeoc/

3
USES OF EMPLOYEE OWNERSHIP
  • Owner Driven
  • Succession Planning
  • Competitiveness Strategy
  • Tax Advantaged Corporate Financing
  • Employee Driven
  • Averting a Plant Shutdown
  • http//dept.kent.edu/oeoc/BuyoutAssistance/WhenEOM
    akesSense.htm

4
Education for Seller Why Employee Ownership
  • Diversify Concentrated Wealth
  • Flexible Multiple Year Transition Out
  • Tax Savings vs Strategic Buyer Price

5
Education for SellerHow to Do the Deal
  • Acceptable Valuation before Going Public
  • Get Commitment (Vote) from Employees
  • Involve Employees in Design
  • Finding Experienced Professionals
  • Grant Money if Job Loss Threatened

6
Education for SellerDesign Issues
  • Administration Cost vs Tax Savings
  • Potential Conflict of Interest as Trustee
  • Repurchase Liability
  • Employee Benefit vs Ownership Culture

7
Education for Buyers
  • Steps In a Buyout
  • Factors to Consider
  • How ESOP or Cooperative Works
  • Design Structuring Issues

8
Education for Buyers Steps in Doing a Buyout
  • Education about the buyout
  • Establish a buyout committee
  • Preliminary feasibility assessment
  • Business Plan
  • Negotiate sales agreement with seller
  • Arrange financing
  • Close deal and CELEBRATE!

9
Education for Buyers Key Factors to Consider
  • Is the current owner willing to sell?
  • Do the employees want to buy?
  • Is there enough time for a buyout?
  • Is the plant competitive?
  • Is competent management available?
  • Is financing available?
  • Will labor-management relations hinder success?

10
Education for Buyers How ESOPs Work
  • How Does the ESOP Buy the Company?
  • How Do I Get in the ESOP?
  • How Do I Get Stock in My Account?
  • How Do I Get My Money?
  • What Rights Do I Have?
  • Voting
  • Information

11
How Do ESOPs Buy Stock?
Employee Owners
12
How Do ESOPs Repay the Loan?
13
How Do I Get Stock in My Account?
14
How Do I Get Stock in My Account?
15
Education for Buyers Design Structuring Issues
  • Wage Concession / Pension Rollover
  • Shared Governance
  • Individual vs Group Interests
  • Future Employees Also Owners?
  • Equity Partners

16
OEOC Web Site Resources
  • http//dept.kent.edu/oeoc/BuyoutAssistance/Stepsin
    Buyout.htm
  • http//dept.kent.edu/oeoc/BuyoutAssistance/Prelimi
    naryFeasibility.htm
  • http//dept.kent.edu/oeoc/BuyoutAssistance/KeyQues
    tions.htm
  • http//dept.kent.edu/oeoc/commonwealthbrochure.pdf
  • http//dept.kent.edu/oeoc/BuyoutAssistance/WhatIsE
    SOP.htm
  • http//dept.kent.edu/oeoc/BuyoutAssistance/Creatin
    gAnOwnershipCulture.htm
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