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The purpose of the ESOP transaction process is to analyze the needs of the shareholders, the company, and the employees to create an ESOP that meets the desires of all parties. The ESOP transaction process is broken into two phases for the shareholders: discovery and implementation.
During the discovery phase, a high-level valuation and feasibility study are performed. Once these components are thoroughly analyzed by comparing a variety of ESOP structures and options, a decision is made as to whether to pursue an ESOP. If the shareholders decide to move forward, the implementation phase begins, which includes the design of the ESOP, financing decisions, documentation, negotiation, and closing.
We discuss each stage of the two phases in detail.
During the valuation stage, certain company financial information is used to analyze the business and create a high-level assessment of your company’s value. PCE’s process usually includes three different valuation methods, which are combined into a detailed model.
The DCF method uses the company’s projected financials to create a detailed, present value of the projected cash flows. The DCF analysis incorporates growth, reinvestment requirements, working capital needs, and any one-time or discretionary expenses to calculate normalized earnings before interest, taxes, depreciation, and amortization – or cash flow. This estimate is the inherent value of the business and is likely the most applicable to the overall valuation, so the company’s projections are carefully considered.
As the name implies, the comparable public company analysis is based on public market trading multiples. Market research is conducted to find and compare companies that are similar or related to your industry, such as your competitors. The public trading multiples used in the valuation are subsequently adjusted for differences such as cost and availability of capital, size, and growth rates.
The comparable transactions method uses multiple databases to find closed transactions within your industry to identify the value based on multiples paid. Transactions found may or may not have information such as the price paid, multiples, and other information that is made public. Because only reported information is used in your company’s valuation, this approach may not be applicable if enough relevant information is not available.
Once all three valuation methods are conducted, the methods are weighted to determine the range of value. These are typically weighted evenly; however, they vary for each situation. The range of value provides your shareholders a floor and a cap to which their investment banker believes the price of a sale can take place. Upon receiving the range, the shareholders will discuss with their investment banker whether any material changes should be made to the financial information that determines value.
The next step in the process is to engage an investment banker as your financial advisor to complete detailed due diligence and produce an all-encompassing feasibility study. The objective of the feasibility study is to help shareholders, board members, and management understand whether an ESOP will achieve the required objectives. The report consists of a more in-depth valuation of the company after fully vetting all financial, company, operational, and legal diligence. Ultimately, the result of the feasibility study and valuation includes an analysis and presentation of multiple scenarios and options that are tailored to your shareholders’ objectives.
In a sale to the ESOP, your company needs to be a corporation and, therefore, may need to address its structure. The company’s legal structure will be evaluated in the feasibility study to optimize the specific tax advantages for the company, the shareholders, or potentially both.
A key component of the feasibility study is liquidity flowing to the shareholders. Presenting the gross and net proceeds of the transaction to your shareholders is important when they are considering the overall structure of the sale to the ESOP.
Once the feasibility study is complete, the findings and options are presented to your shareholders. A thorough discussion ensues to determine the ESOP transaction structure that is best for everyone involved. The feasibility study can be modified based on the results initially presented, which allows the shareholders to consider different structures or the combination of a few of the options. Once the options are narrowed down to one structure, your shareholders must decide whether to pursue the ESOP transaction or to put it on hold until a future date.
Once you’ve decided to move forward with the ESOP transaction, the process to develop the structure, terms, and conditions of the overall transaction begins.
First, you must assemble the rest of your team if that has not already occurred. The company team includes the company attorney and accountant, and shareholders personal wealth advisor. Likewise, the buyer, or ESOP trustee, will have its own team, which includes an attorney and valuation firm. (One unique characteristic about ESOPs is that you get to choose the trustee, and you get to choose your own buyer!) Your team will work with the shareholders and board members to interview and hire the trustee of the ESOP. Once the teams are in place, a comprehensive presentation outlining the company and its history, financial performance, employees, clients, industry metrics, and other pertinent information is designed.
Included with the presentation is a detailed memo outlining the entire structure of the transaction. The memo consists of the sale price, financing terms, a timeline of the transaction, executive compensation, synthetic equity, management, benefit levels, and appointed board members. The company team presents the transaction design in a formal meeting with the trustee team.
Financing in an ESOP is a fundamental step. The initial process is to work with your shareholders and determine the amount of liquidity they desire. A reputable investment banker will know the market and thoroughly analyze all financing options available to the shareholders, ultimately determining the amount of cash they will receive at closing.
Once the amount of cash is identified, multiple financing sources are approached. The financing sources may include commercial banks, mezzanine or secondary lenders, or deeply subordinated creditors. Upon going to market, your investment banker will know how to approach the lenders to achieve the best available terms and conditions and achieve the desired liquidity. Your shareholders also have the option of financing the transaction themselves through a seller note. They act as the bank in the transaction, whereby they receive monthly or quarterly principal payments along with interest payments at a market rate. Financing the debt themselves takes away cash in hand at closing but allows them maximum flexibility and a current return on the debt.
Another financing alternative is to raise equity from a private equity firm or the employees of the company. While these are not commonly used approaches, they are options to consider during the financing stage.
Once the design and financing stages are in commitment form, your team, under the guidance of your corporate attorney, will create and/or review all documentation for the transaction.
The financing documents are prepared by the lender’s attorney and include any existing loans and the new loans associated with the ESOP transaction. These documents include a loan and security agreement and promissory notes, and in some cases with multiple lenders, an intercreditor agreement will be required.
The company’s attorney typically prepares the transaction documents. The most important document, the stock purchase agreement, will outline the complete details of the transaction and include specific representations and warranties. Structuring and negotiating this document take time and effort and should be planned for accordingly within the overall timeline.
Employment agreements, synthetic equity plans such as warrants and stock appreciation rights, and corporate documents are all included with the transaction documents.
Equally important is the ESOP plan and summary description, which outlines the structure of the plan, the ESOP trust, and essential points that pertain to those who participate in the ESOP.
The ESOP transaction process can vary depending on many influences including, but not limited to, complexity, financing, and legal and regulatory matters. A typical time frame, from hiring your investment banker as your financial advisor to closing, is approximately five months. As the timeline indicates, the stages can overlap, but with a qualified investment banker, the transaction process will result in an effective ESOP implementation that achieves the shareholders’ goals.
Investment Banking | ESOP
ezaleski@pcecompanies.com
Chicago Office
407-621-2100 (main)
847-239-2466 (direct)
407-621-2199 (fax)
During the discovery phase, a high-level valuation and feasibility study are performed. Once these components are thoroughly analyzed by comparing a variety of structures and options, a decision is made as to whether to pursue an ESOP. If the shareholder(s) decides to move forward, the implementation phase begins, which includes the design of the ESOP, financing decisions, documentation, negotiation and closing.
We discuss each stage of the two phases in detail.
[Insert arrow image]
Valuation
During the valuation stage, a brief list of company financial information is used to analyze the business and create a high-level assessment of the company's value. PCE's process includes three different valuation methods, which are combined into a detailed model.
Discounted Cash Flow Analysis (DCF)
The DCF method uses the company's projected financials to create a detailed, present value of the projected cash flows. The DCF analysis incorporates growth, reinvestment requirements, working capital needs, and any one-time or discretionary expenses to calculate a normalized earnings before interest taxes depreciation and amortization – or EBITDA. This estimate is the inherent value of the business and is likely the most applicable to the overall valuation, so careful consideration on the company's projections should be adhered to.
Comparable Public Company Analysis
As the name implies, the comparable public company analysis is based on public market trading multiples. Market research is conducted to find and compare companies that are similar or related to your industry, such as your competitors. The public trading multiples used in the valuation are subsequently adjusted for differences such as cost and availability of capital, size, and growth rates.
Comparable Transactions
The comparable transaction method uses multiple databases to find closed transactions within your industry to identify the value based on multiples paid. Transactions found may or may not have information such as the price paid, multiples, and other information that is made public. Because only reported information is used in your company's valuation, this approach may not be applicable if enough relevant information is not available.
Once all three valuations methods are conducted, the methods are weighted to determine the range of value. These are typically weighted evenly; however, they vary for each situation. The range of value provides the shareholders a floor and a cap to which their investment banker believes the price of a sale can take place. Upon receiving the range, the shareholders will discuss with their investment banker if any material changes should be made
Feasibility Study
The next step in the process is to engage an investment banker as your financial advisor to complete detailed due diligence and produce a feasibility study that is all-encompassing of a transaction. The objective of the feasibility study is to help shareholders, board members, and management understand if an ESOP will achieve the required objectives. The report consists of a more in-depth valuation of the company after fully vetting all financial, company, operational, and legal diligence. Ultimately, the result of the feasibility study and valuation includes an analysis and presentation of multiple scenarios and options that are tailored to the shareholder's objectives.
In a sale to the ESOP, the company needs to be a corporation and, therefore, may need to address their structure. The company legal structure will be evaluated in the feasibility study to optimize the specific tax advantages for either the company, shareholder, or potentially both.
A key component of the feasibility study is the view of liquidity to the shareholders. It addresses how much can be provided, the market for terms and structure, and the company's ability to repay the debt. Presenting the gross and net proceeds to the shareholders in a transaction is important when they are considering the overall structure of the sale to the ESOP.
Once the feasibility study is complete, the findings and options are presented to the shareholders. A thorough discussion is done to determine what structure is best for everyone involved. The feasibility study can be modified based on the results initially presented to allow the shareholders to consider different structures or the combination of a few of the options. Once narrowed down to one structure, the shareholders must decide whether to pursue the ESOP transaction or to put it on hold for a future date.
Design
Now that you've decided to move forward with the ESOP transaction, the process to develop the structure, terms, and conditions of the overall transaction begins.
First, you must assemble the rest of your team if not already done. The company team includes the company attorney, accountant, and personal wealth advisor. Consequently, the buyer, or ESOP Trustee, will have their own team, which includes an attorney and valuation firm. (One unique characteristic about ESOPs is that you get to choose the trustee, and you get to choose your own buyer!) Your team will work with the shareholders and board members to interview and hire the trustee of the ESOP. Once the teams are in place, a comprehensive presentation outlining the company, its history, financial performance, employees, clients, industry metrics and other pertinent information is designed.
Included with the presentation is a detailed memo outlining the entire structure of the transaction. The memo consists of the sale price, financing terms, a timeline of the transaction, executive compensation, synthetic equity, management, benefit levels, and appointed board members. The entire team presents the transaction design and presentation in a formal meeting with the trustee team.
Financing
Financing in an ESOP is a fundamental step. The initial process is to work with the shareholders and determine the amount of liquidity they desire. A reputable investment banker will know the market and thoroughly analyze all financing options available to the shareholders, ultimately determining what cash they will receive at closing.
Once identified, multiple financing sources are approached. The financing sources may include commercial banks, mezzanine or secondary lenders, or deeply subordinated creditors. Upon going to market, your investment banker will know how to approach the lenders to achieve the best available terms and conditions and achieve the desired liquidity. The shareholders also have the option of financing the transaction themselves through a seller note. They act as the bank in the transaction, whereby they receive monthly or quarterly principal payments along with interest payments at a market rate. Financing the debt themselves takes away cash in hand at closing yet allows shareholders maximum flexibility and a current return on the debt.
One other financing alternative is to raise equity from a private equity firm or the employees of the company. While not a commonly used approach, it is an option to possibly consider during the financing stage.
Closing
Once the design and financing stages are in commitment form, your team, and primarily corporate attorney, will create and review all documentation for the transaction.
Financing Documents
The financing documents are prepared by the lender's attorney and include any existing loans and the new loans associated with the ESOP transaction. These documents include a Loan and Security Agreement, Promissory Notes, and in some cases, with multiple lenders, an inter-creditor agreement will be required.
Transaction Documents
The company's attorney typically prepares the transaction documents. The most important document, the Stock Purchase Agreement, will outline the complete details of the transaction and include specific representations and warranties. Structuring and negotiating this document takes time and effort and should be planned for accordingly within the overall timeline.
Employment Agreements, synthetic equity plans such as warrants and stock appreciation rights, as well as corporate documents, are all included with the transaction documents.
ESOP Documents
Equally important is the ESOP Plan & Summary Description, which outlines the structure of the plan, the ESOP Trust, and essential points that pertain to those who participate in the ESOP.
ESOP Timeline
[insert timeline image]
The ESOP transaction process can vary depending on many influences including but not limited to, complexity, financing, legal, and regulatory matters. A typical timeframe from hiring your investment banker as your financial advisor, to closing is approximately five months. This timeline includes all of the five deal stages discussed here. As the timeline indicates, most of the stages overlap, but with a qualified investment banker, the transaction process will result in an effective ESOP installation which achieves the shareholders goals.
During the discovery phase, a high-level valuation and feasibility study are performed. Once these components are thoroughly analyzed by comparing a variety of structures and options, a decision is made as to whether to pursue an ESOP. If the shareholder(s) decides to move forward, the implementation phase begins, which includes the design of the ESOP, financing decisions, documentation, negotiation and closing.
We discuss each stage of the two phases in detail.
[Insert arrow image]
Valuation
During the valuation stage, a brief list of company financial information is used to analyze the business and create a high-level assessment of the company's value. PCE's process includes three different valuation methods, which are combined into a detailed model.
Discounted Cash Flow Analysis (DCF)
The DCF method uses the company's projected financials to create a detailed, present value of the projected cash flows. The DCF analysis incorporates growth, reinvestment requirements, working capital needs, and any one-time or discretionary expenses to calculate a normalized earnings before interest taxes depreciation and amortization – or EBITDA. This estimate is the inherent value of the business and is likely the most applicable to the overall valuation, so careful consideration on the company's projections should be adhered to.
Comparable Public Company Analysis
As the name implies, the comparable public company analysis is based on public market trading multiples. Market research is conducted to find and compare companies that are similar or related to your industry, such as your competitors. The public trading multiples used in the valuation are subsequently adjusted for differences such as cost and availability of capital, size, and growth rates.
Comparable Transactions
The comparable transaction method uses multiple databases to find closed transactions within your industry to identify the value based on multiples paid. Transactions found may or may not have information such as the price paid, multiples, and other information that is made public. Because only reported information is used in your company's valuation, this approach may not be applicable if enough relevant information is not available.
Once all three valuations methods are conducted, the methods are weighted to determine the range of value. These are typically weighted evenly; however, they vary for each situation. The range of value provides the shareholders a floor and a cap to which their investment banker believes the price of a sale can take place. Upon receiving the range, the shareholders will discuss with their investment banker if any material changes should be made
Feasibility Study
The next step in the process is to engage an investment banker as your financial advisor to complete detailed due diligence and produce a feasibility study that is all-encompassing of a transaction. The objective of the feasibility study is to help shareholders, board members, and management understand if an ESOP will achieve the required objectives. The report consists of a more in-depth valuation of the company after fully vetting all financial, company, operational, and legal diligence. Ultimately, the result of the feasibility study and valuation includes an analysis and presentation of multiple scenarios and options that are tailored to the shareholder's objectives.
In a sale to the ESOP, the company needs to be a corporation and, therefore, may need to address their structure. The company legal structure will be evaluated in the feasibility study to optimize the specific tax advantages for either the company, shareholder, or potentially both.
A key component of the feasibility study is the view of liquidity to the shareholders. It addresses how much can be provided, the market for terms and structure, and the company's ability to repay the debt. Presenting the gross and net proceeds to the shareholders in a transaction is important when they are considering the overall structure of the sale to the ESOP.
Once the feasibility study is complete, the findings and options are presented to the shareholders. A thorough discussion is done to determine what structure is best for everyone involved. The feasibility study can be modified based on the results initially presented to allow the shareholders to consider different structures or the combination of a few of the options. Once narrowed down to one structure, the shareholders must decide whether to pursue the ESOP transaction or to put it on hold for a future date.
Design
Now that you've decided to move forward with the ESOP transaction, the process to develop the structure, terms, and conditions of the overall transaction begins.
First, you must assemble the rest of your team if not already done. The company team includes the company attorney, accountant, and personal wealth advisor. Consequently, the buyer, or ESOP Trustee, will have their own team, which includes an attorney and valuation firm. (One unique characteristic about ESOPs is that you get to choose the trustee, and you get to choose your own buyer!) Your team will work with the shareholders and board members to interview and hire the trustee of the ESOP. Once the teams are in place, a comprehensive presentation outlining the company, its history, financial performance, employees, clients, industry metrics and other pertinent information is designed.
Included with the presentation is a detailed memo outlining the entire structure of the transaction. The memo consists of the sale price, financing terms, a timeline of the transaction, executive compensation, synthetic equity, management, benefit levels, and appointed board members. The entire team presents the transaction design and presentation in a formal meeting with the trustee team.
Financing
Financing in an ESOP is a fundamental step. The initial process is to work with the shareholders and determine the amount of liquidity they desire. A reputable investment banker will know the market and thoroughly analyze all financing options available to the shareholders, ultimately determining what cash they will receive at closing.
Once identified, multiple financing sources are approached. The financing sources may include commercial banks, mezzanine or secondary lenders, or deeply subordinated creditors. Upon going to market, your investment banker will know how to approach the lenders to achieve the best available terms and conditions and achieve the desired liquidity. The shareholders also have the option of financing the transaction themselves through a seller note. They act as the bank in the transaction, whereby they receive monthly or quarterly principal payments along with interest payments at a market rate. Financing the debt themselves takes away cash in hand at closing yet allows shareholders maximum flexibility and a current return on the debt.
One other financing alternative is to raise equity from a private equity firm or the employees of the company. While not a commonly used approach, it is an option to possibly consider during the financing stage.
Closing
Once the design and financing stages are in commitment form, your team, and primarily corporate attorney, will create and review all documentation for the transaction.
Financing Documents
The financing documents are prepared by the lender's attorney and include any existing loans and the new loans associated with the ESOP transaction. These documents include a Loan and Security Agreement, Promissory Notes, and in some cases, with multiple lenders, an inter-creditor agreement will be required.
Transaction Documents
The company's attorney typically prepares the transaction documents. The most important document, the Stock Purchase Agreement, will outline the complete details of the transaction and include specific representations and warranties. Structuring and negotiating this document takes time and effort and should be planned for accordingly within the overall timeline.
Employment Agreements, synthetic equity plans such as warrants and stock appreciation rights, as well as corporate documents, are all included with the transaction documents.
ESOP Documents
Equally important is the ESOP Plan & Summary Description, which outlines the structure of the plan, the ESOP Trust, and essential points that pertain to those who participate in the ESOP.
ESOP Timeline
[insert timeline image]
The ESOP transaction process can vary depending on many influences including but not limited to, complexity, financing, legal, and regulatory matters. A typical timeframe from hiring your investment banker as your financial advisor, to closing is approximately five months. This timeline includes all of the five deal stages discussed here. As the timeline indicates, most of the stages overlap, but with a qualified investment banker, the transaction process will result in an effective ESOP installation which achieves the shareholders goals.
During the discovery phase, a high-level valuation and feasibility study are performed. Once these components are thoroughly analyzed by comparing a variety of structures and options, a decision is made as to whether to pursue an ESOP. If the shareholder(s) decides to move forward, the implementation phase begins, which includes the design of the ESOP, financing decisions, documentation, negotiation and closing.
We discuss each stage of the two phases in detail.
[Insert arrow image]
Valuation
During the valuation stage, a brief list of company financial information is used to analyze the business and create a high-level assessment of the company's value. PCE's process includes three different valuation methods, which are combined into a detailed model.
Discounted Cash Flow Analysis (DCF)
The DCF method uses the company's projected financials to create a detailed, present value of the projected cash flows. The DCF analysis incorporates growth, reinvestment requirements, working capital needs, and any one-time or discretionary expenses to calculate a normalized earnings before interest taxes depreciation and amortization – or EBITDA. This estimate is the inherent value of the business and is likely the most applicable to the overall valuation, so careful consideration on the company's projections should be adhered to.
Comparable Public Company Analysis
As the name implies, the comparable public company analysis is based on public market trading multiples. Market research is conducted to find and compare companies that are similar or related to your industry, such as your competitors. The public trading multiples used in the valuation are subsequently adjusted for differences such as cost and availability of capital, size, and growth rates.
Comparable Transactions
The comparable transaction method uses multiple databases to find closed transactions within your industry to identify the value based on multiples paid. Transactions found may or may not have information such as the price paid, multiples, and other information that is made public. Because only reported information is used in your company's valuation, this approach may not be applicable if enough relevant information is not available.
Once all three valuations methods are conducted, the methods are weighted to determine the range of value. These are typically weighted evenly; however, they vary for each situation. The range of value provides the shareholders a floor and a cap to which their investment banker believes the price of a sale can take place. Upon receiving the range, the shareholders will discuss with their investment banker if any material changes should be made
Feasibility Study
The next step in the process is to engage an investment banker as your financial advisor to complete detailed due diligence and produce a feasibility study that is all-encompassing of a transaction. The objective of the feasibility study is to help shareholders, board members, and management understand if an ESOP will achieve the required objectives. The report consists of a more in-depth valuation of the company after fully vetting all financial, company, operational, and legal diligence. Ultimately, the result of the feasibility study and valuation includes an analysis and presentation of multiple scenarios and options that are tailored to the shareholder's objectives.
In a sale to the ESOP, the company needs to be a corporation and, therefore, may need to address their structure. The company legal structure will be evaluated in the feasibility study to optimize the specific tax advantages for either the company, shareholder, or potentially both.
A key component of the feasibility study is the view of liquidity to the shareholders. It addresses how much can be provided, the market for terms and structure, and the company's ability to repay the debt. Presenting the gross and net proceeds to the shareholders in a transaction is important when they are considering the overall structure of the sale to the ESOP.
Once the feasibility study is complete, the findings and options are presented to the shareholders. A thorough discussion is done to determine what structure is best for everyone involved. The feasibility study can be modified based on the results initially presented to allow the shareholders to consider different structures or the combination of a few of the options. Once narrowed down to one structure, the shareholders must decide whether to pursue the ESOP transaction or to put it on hold for a future date.
Design
Now that you've decided to move forward with the ESOP transaction, the process to develop the structure, terms, and conditions of the overall transaction begins.
First, you must assemble the rest of your team if not already done. The company team includes the company attorney, accountant, and personal wealth advisor. Consequently, the buyer, or ESOP Trustee, will have their own team, which includes an attorney and valuation firm. (One unique characteristic about ESOPs is that you get to choose the trustee, and you get to choose your own buyer!) Your team will work with the shareholders and board members to interview and hire the trustee of the ESOP. Once the teams are in place, a comprehensive presentation outlining the company, its history, financial performance, employees, clients, industry metrics and other pertinent information is designed.
Included with the presentation is a detailed memo outlining the entire structure of the transaction. The memo consists of the sale price, financing terms, a timeline of the transaction, executive compensation, synthetic equity, management, benefit levels, and appointed board members. The entire team presents the transaction design and presentation in a formal meeting with the trustee team.
Financing
Financing in an ESOP is a fundamental step. The initial process is to work with the shareholders and determine the amount of liquidity they desire. A reputable investment banker will know the market and thoroughly analyze all financing options available to the shareholders, ultimately determining what cash they will receive at closing.
Once identified, multiple financing sources are approached. The financing sources may include commercial banks, mezzanine or secondary lenders, or deeply subordinated creditors. Upon going to market, your investment banker will know how to approach the lenders to achieve the best available terms and conditions and achieve the desired liquidity. The shareholders also have the option of financing the transaction themselves through a seller note. They act as the bank in the transaction, whereby they receive monthly or quarterly principal payments along with interest payments at a market rate. Financing the debt themselves takes away cash in hand at closing yet allows shareholders maximum flexibility and a current return on the debt.
One other financing alternative is to raise equity from a private equity firm or the employees of the company. While not a commonly used approach, it is an option to possibly consider during the financing stage.
Closing
Once the design and financing stages are in commitment form, your team, and primarily corporate attorney, will create and review all documentation for the transaction.
Financing Documents
The financing documents are prepared by the lender's attorney and include any existing loans and the new loans associated with the ESOP transaction. These documents include a Loan and Security Agreement, Promissory Notes, and in some cases, with multiple lenders, an inter-creditor agreement will be required.
Transaction Documents
The company's attorney typically prepares the transaction documents. The most important document, the Stock Purchase Agreement, will outline the complete details of the transaction and include specific representations and warranties. Structuring and negotiating this document takes time and effort and should be planned for accordingly within the overall timeline.
Employment Agreements, synthetic equity plans such as warrants and stock appreciation rights, as well as corporate documents, are all included with the transaction documents.
ESOP Documents
Equally important is the ESOP Plan & Summary Description, which outlines the structure of the plan, the ESOP Trust, and essential points that pertain to those who participate in the ESOP.
ESOP Timeline
[insert timeline image]
The ESOP transaction process can vary depending on many influences including but not limited to, complexity, financing, legal, and regulatory matters. A typical timeframe from hiring your investment banker as your financial advisor, to closing is approximately five months. This timeline includes all of the five deal stages discussed here. As the timeline indicates, most of the stages overlap, but with a qualified investment banker, the transaction process will result in an effective ESOP installation which achieves the shareholders goals.