ESOP Valuations

Exit Strategies & Succession Planning

Companies that sponsor employee stock ownership plans (ESOPs) must satisfy relevant ERISA requirements from the Department of Labor and the Internal Revenue Service. At least annually, they must obtain an independent valuation of the stock held by the ESOP for purposes of administering the plan.

The regulations are very clear in stating that the valuator must be independent in fact and in perception. The regulations allow the fiduciary to perform the valuation, provided they meet two requirements. First, the fiduciary must be independent of all the parties, other than the plan trust. Second, the fiduciary must have the facilities and the expertise to undertake the valuation. If the fiduciary does not possess the training and expertise to meet these requirements, the fiduciary fails to meet the prudent investigation and the sound business principles requirement of §2510.3-18(b)(3)(iii). When this occurs, the trustee must hire an independent qualified valuation professional.

Experience the Vision Point Capital Difference

The Vision Point Capital advisory team has a nationwide footprint for serving the ESOP community and has the necessary knowledge depth and expertise to be a trusted resource to business owners and fiduciaries. We’ve helped many businesses with valuation needs for setting up an initial ESOP and maintaining an existing ESOP. We’ve also performed valuations toward the end of the ESOP’s lifecycle before the company is sold to a strategic buyer.

ESOP Valuation Services

When you work with Vision Point Capital, you will find that we will work with you every step of the way. Our ESOP valuation and consulting services include:

  • Feasibility studies
  • Strategic planning
  • Preliminary and initial transaction valuation
  • Annual valuations
  • Fairness opinions
  • Repurchase obligations

Trustees – contact us and let us take on the complex valuation issues surrounding your ESOP, so you can peace of mind, knowing that an experienced advisor is on your side.