Partnering with business owners, ESOP leaders and
representing employee owners is our business.
ERISA requires that each ESOP plan has a trustee to serve as fiduciary on behalf of the employee participants. The company, as ESOP plan sponsor, may appoint an internal trustee(s) or hire an independent party to serve as an external trustee. External trustees are generally required for ESOP formations or sale transactions. At Acumen, we are pleased to serve as an external trustee for a specific transaction involving an ESOP or as an ongoing trustee for those companies that desire to outsource the trustee function.
transactional Trustee services
When you choose to engage an Acumen trustee to serve as transactional trustee, we will work with you to build out a project timeline based on the contemplated transaction, generally encompassing a 90-120 day time period.
Upon engagement, your trustee will form the “buy side” team by adding a valuation firm and identifying ESOP counsel to be used later in the process. We may either select a valuation firm from our pre-approved valuation advisor list or run a selection process as this is a long-term relationship. The Trustee Team will provide a due diligence request list and will begin with the financial due diligence, which includes an onsite visit and discussions with management. This preliminary due diligence will allow us to either initiate a Letter of Intent “LOI” to purchase the Company on behalf of the ESOP or respond to a term sheet provided by the Sellers. This begins the negotiation process and will result in discussions around price, financing, structure, balance sheet targets, employment agreements, governance structure and other various terms.
Assuming basic terms are agreed to by all parties, full due diligence and documentation commences with a goal of completing final negotiations around representations and warranties and other deal-related matters. The closing process begins when Seller counsel drafts the appropriate closing documents and we involve ESOP counsel to assist with the transaction document review.
ongoing trustee services
When you choose to engage an Acumen trustee to outsource your ongoing ESOP trustee needs, we will work with you to satisfy the annual requirements for your ESOP according to current Department of Labor guidance and industry best practices. As an independent trustee, we are responsible for determining the annual ESOP share value for administrative purposes, managing any investments within the ESOP and voting the shares for corporate matters, primarily the appointment of the Board of Directors.