ESOP Valuation

ESOPs (Employee Stock Ownership Plans) have become prevalent over the past 40 years. The National Center for Employee Ownership estimates that 11,000 companies in the US now have these plans. Mirus works with ESOP-owned companies and ESOP trustees, as well as with business owners considering an ESOP for shareholder liquidity to provide ESOP feasibility studies, fairness opinions, and annual ERISA-compliant ESOP valuations.

ESOPs are attractive vehicles for shareholder liquidity in certain circumstances, due to their tax advantages. The fundamental ESOP structure involves a trust into which a company contributes new shares of its own stock or cash to buy existing shares. Company contributions to the trust are tax-deductible, within certain limits, and C corporations may also deduct interest payments and reasonable dividends that are paid in cash. When employees of a privately-held ESOP company leave the company, they receive their stock, which the company must buy back from them at its fair market value. Private companies must have an annual outside valuation to determine the price of their shares.

Contact Us to discuss the Mirus sale process, or to learn more about how Mirus can help you with all of your valuation needs, including 409A Valuation, Purchase Price Allocation, Business Valuation, Fairness Opinions, and Financial Reporting.