March 31, 2017
Research on the Prevalence of ESOPs as an Exit Strategy
Loren Rodgers
Executive Director
In a March 2017 paper, Employee Stock Ownership Plans as an Exit Strategy for Private Business Owners, Alex Brill of examined a number of paths by which current owners may leave or sell part of their stake in their businesses. The study, sponsored by Employee-Owned S Corporations of America, looked at over 10,000 transactions that changed the ownership of privately owned companies during 2015. The results are in the table below.
| Percent of 2015 transactions | |
|---|---|
| Domestic mergers and acquisitions | 79% |
| Foreign mergers and acquisitions (i.e., a non-U.S. firm buys a U.S. firm) | 15% |
| Private equity buyouts | 4% |
| Initial public offerings (IPOs) | 1% |
| Conversion to S corporation ESOP | 1% |