Warner Norcross + Judd LLP represented Speedrack Products Group Ltd. in becoming one of the latest West Michigan companies to transition to employee ownership. The sale and transition to employee ownership was completed at the end of 2022.
As owner and CEO Ron Ducharme planned for the company’s succession to new ownership for when he retired, he opted to create an ESOP to preserve local ownership, culture, management and partnerships with customers and distributors. The ESOP acquired 100% of the company’s stock at no cost to employees that will be paid out in cash when they leave the company. Employees 21 and older who have been with the company for three months are eligible to participate in the ESOP and earn shares as they continue to work for the company. They are paid for those shares after they leave the company.
Ducharme shared that in planning for succession, he “wanted to leave the company in the hands of an organization that is long-term focused,” instead of sell to a private equity investor who may retrade the company in a few years.
Speedrack Products Group has been at the forefront of the storage products industry for over 65 years and is one of the leading suppliers of pallet racking and storage systems. With over 260 employees at the company’s Walker and Quincy facilities, Speedrack Products Group is committed to provide material handling systems and equipment that maximizes their customers’ use of space and contribute to effective warehouse logistics solutions.
Warner served as legal counsel to Speedrack Products Group Ltd. in its establishment as an ESOP. The Warner transaction team was led by Justin Stemple and included Josie Boucher, Johnny Pinjuv and Rob Davies.
Local advisers to the company included BDO Capital and to the ESOP included Vision ESOP Valuation LLC.
Read the full MiBiz article here.
Warner’s ESOP Practice
Warner has established more employee stock ownership plans (ESOPs) than any other law firm in Michigan. Whether an ESOP is used to purchase stock owned by existing shareholders on a tax-deferred or tax-free basis, or to raise capital for the corporation, we can guide you through the maze of legal requirements and practical concerns.
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