A business can take decades to build and only one transaction to change its future.
For owners who care deeply about what happens after they sell, finding the right buyer means looking beyond the terms of the deal. EmbedTek’s ownership team took that approach, thinking about its eventual transition years before a sale was on the table.
EmbedTek’s decision to ultimately sell to OwnersEdge offers a real-world look at five ways a ready-made ESOP can support owners who want to preserve the business they built.
But first, you may be wondering, what is a legacy-minded business seller?
What Does It Mean to Be a Legacy-Minded Business Seller?
Financial goals are an important part of any ownership transition, but the four EmbedTek partners had a broader vision for what a successful sale would look like:
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EmbedTek would continue operating as its own entity with its culture intact.
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Employees would have a positive future with the business.
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Existing owners could remain involved in leading the company through and post the transition for a period of time.
EmbedTek President and CEO Dan Aicher says the leadership team had options when it came to selling the business, but obtaining the highest possible price wasn’t the only consideration.
“When you nurture a business, you do think of it as your baby, as your legacy. When you’ve built something from scratch, you do wonder if the next generation of ownership will carry on.” — EmbedTek President and CEO Dan Aicher
Dan’s perspective reflects a central concern for legacy-minded sellers: finding a long-term caretaker who will carry the business forward. EmbedTek found one possible succession path through a ready-made ESOP.
EmbedTek’s experience with OwnersEdge highlights five ways the model can support legacy-focused priorities.
How Did a Ready-Made ESOP Support Legacy-Minded Business Owners?
A ready-made ESOP can support legacy-minded business owners by providing an established path to employee ownership. Here are five specific advantages a ready-made ESOP model provides.
1. Preserve the Business You Built
EmbedTek considered strategic buyers that could place significant value on its customer relationships and intellectual property. The ownership team also understood that overlapping functions could lead a strategic buyer to eliminate parts of EmbedTek’s existing operation or workforce.
OwnersEdge offered a different ownership model. As an ESOP holding company, OwnersEdge takes a long-term approach while allowing its operating companies to maintain their distinct identities.
The distinction between potential buyers mattered, and ultimately, the EmbedTek ownership team selected the buyer that could satisfy its biggest priority: EmbedTek could remain EmbedTek.
Legacy-minded sellers should consider what a potential buyer ultimately intends to own. Is the buyer interested in carrying the business forward, or primarily in acquiring certain pieces of its value? The answer can reveal a great deal about what the company may look like after closing.
2. Protect the Culture and People Behind the Business
EmbedTek’s owners knew firsthand how an acquisition could affect employees. Members of the leadership team had experienced previous ownership transitions in which the culture deteriorated after the sale, and they committed early on to finding a different path for EmbedTek.
The commitment was personal. Several employees had followed the leadership team from a previous company because they valued the workplace culture the leaders had built, with many of these employees accepting lower compensation to make the move due to how important company culture was to them. Protecting the people who helped grow EmbedTek became an important consideration when evaluating potential buyers.
The owners found common ground with OwnersEdge. CEO Rob Dillon recalls a pre-acquisition conversation about company values.
“The beauty of the conversation was in its simplicity,” says Rob. “We talked about looking for employees who are humble, hungry, and smart, and how our core values are essentially derivatives of those principles.”
Dan shared EmbedTek’s guiding principle: the Golden Rule.
“It became very clear to me early in discussions with OwnersEdge that they truly put their employee owners first. And then post-acquisition, it comes across in every interaction.” — EmbedTek President and CEO Dan Aicher
For EmbedTek’s owners, protecting employees meant finding a buyer that shared their values. A ready-made ESOP added another opportunity: giving employees a stake in the company’s future.
Culture is an important component of a successful business. Employee ownership also creates a unique culture that OwnersEdge CFO John Hooyman talks about in his blog post, “What I’ve Observed Inside Employee-Owned Companies Over Two Decades.”
3. Make Employee Ownership Part of Your Succession Plan
EmbedTek had already explored creating its own ESOP before engaging with OwnersEdge; Dan believed the company could establish one independently. Joining OwnersEdge, however, gave employees a faster path to ownership by allowing EmbedTek to enter an established ESOP rather than requiring the necessary time to create and implement a standalone plan.
“After engaging with OwnersEdge and seeing the advantages that a ready-made ESOP would provide to our employees, the acquisition just made all the sense in the world.” — EmbedTek President and CEO Dan Aicher
For EmbedTek’s owners, joining an established ESOP also made the ownership transition itself more straightforward.
4. Simplify the Path to an ESOP Transition
Joining an established ESOP also offered advantages on the seller side of the transaction. Dan identified a faster path to closing, along with the ability to achieve the owners’ employee ownership goals through an established structure.
Financing was another consideration. EmbedTek had four equal owners who held different views on seller financing. The OwnersEdge transaction did not require it, removing an issue the ownership team otherwise would have needed to resolve.
What does a ready-made ESOP offer? The OwnersEdge ready-made ESOP model gives businesses a path to employee ownership through an established structure, experienced ESOP leadership, and strategic resources. Companies join a diversified portfolio of employee-owned businesses with support for long-term growth.
5. Keep the Business Focused on Long-Term Growth
EmbedTek’s owners were not planning to close a transaction and immediately leave; they wanted to remain involved. OwnersEdge's model allowed the leadership team to retain decision-making authority over the business.
“Our team wanted to work through our ownership transition for an extended period of time. We did not want to just throw the keys on the table, exchange checks, and be on our way.” — EmbedTek President and CEO Dan Aicher
The sale also resolved a succession question that EmbedTek’s leadership had discussed for years.
“Becoming part of OwnersEdge has taken one major element of our monthly agenda off the table,” Dan said. “With the question settled, the team now devotes more attention to growth opportunities and new ways to apply EmbedTek’s capabilities.”
OwnersEdge's holding company model gives EmbedTek the opportunity to keep building on what its owners started. For EmbedTek, resolving succession has created more room to focus on where the business goes next.
Finding the Right Buyer Starts Long Before You Sell
Dan’s advice for other business owners is simple: Start looking early.
EmbedTek began engaging with OwnersEdge approximately four years before the acquisition closed. The time gave both organizations an opportunity to build a relationship and learn whether the fit went beyond the financial terms of a potential transaction.
“[With OwnersEdge] we talked about trust a lot, we talked about respect, and you don't build that kind of communication during a traditional sales process.”
— EmbedTek President and CEO Dan Aicher
Early conversations give owners time to understand how a potential acquirer operates and what becoming part of the organization could mean for the business. Just as important, years of interaction provide an opportunity to determine whether the trust and shared values discussed during a sale process could hold up over time.
Thinking about starting the conversation around an acquisition? Read more about the specific acquisition criteria OwnersEdge has in place.
Is a Ready-Made ESOP the Right Succession Path for Your Business?
A sale may close the ownership chapter for a business owner, but it does not have to close the chapter on growth, employee success, and the business’s legacy.
EmbedTek’s experience shows how a ready-made ESOP can create another path forward when legacy matters. Starting the succession conversation early gives owners time to define their priorities and find a buyer who shares their vision for the business.
Considering what comes next for your business?
Confidentially talk with OwnersEdge about whether a ready-made ESOP belongs in your succession plan.