Healthcare M&A – ESOPs Made Clear

About the Episode

Employee stock ownership plans, known as ESOPs, are an M&A alternative that places shares of a company in the hands of employees. This complex topic is the focus of Michael Bannon and Jordan Burg, ESOP experts in the healthcare industry with boutique investment bank CSG Partners. They discuss considerations around structuring an ESOP, advantages to owners and employees, the impact ESOPs can have on increasing employee happiness and tenure, and advice that goes beyond companies in the healthcare space.

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In this Episode

3:11 When was the first employee stock ownership plan (ESOP)?
5:32 What makes M&A activity within the healthcare industry unique versus other industries?
10:00 What is an ESOP, and what makes it a complex but potentially advantageous transaction?
15:31 How common are ESOPs in the healthcare sector?
19:45 What are some of the benefits of employee ownership for healthcare companies?
25:30 How do ESOPs compare to other exit options, particularly in terms of cash at closing?
28:15 How do lenders in the healthcare space view ESOPs?
31:05 How do ESOPs compete with strategic buyers and private equity firms from an operational perspective?
33:44 How do ESOPs address the unique issues related to the healthcare industry, such as offering a flexible exit strategy for partners in medical practice?
36:48 What companies are not a good fit for ESOPs, and what are the prerequisites for a company to have in place before considering an ESOP?
38:48 What does a full life cycle look like for a healthcare company with an ESOP?
41:57 Advice to a middle market business owner considering an ESOP in any industry.

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Meet Our Guest

Michael Bannon

Michael Bannon

Vice President at CSG Partners

With experience that spans investment management, advisory, and capital markets, Michael Bannon has a deep understanding of the financial and practical needs of private businesses. From high-growth founder-run companies to multinational enterprises, Michael has partnered with key stakeholders to craft unique transaction structures utilized across dynamic macroeconomic environments.

Since joining CSG in 2017, he has advised middle-market clients on shareholder liquidity options, including ESOP M&A transactions and recapitalizations. Michael has structured transactions, secured financing, and led extensive due diligence and valuation exercises for closely-held healthcare, consumer goods, and industrial firms, among others.
Michael previously worked with an independent private equity fund of funds, deploying and managing $2.3 billion across private companies. As part of a Shanghai and Munich-based investment team, he managed growth capital and leveraged buyout-oriented investments across Europe and Asia.
A native of Rochester, Minnesota, Mike anchors CSG’s ESOP investment banking efforts throughout the Midwest.

Location Location: New York, New York

Meet Our Guest

Michael Bannon

Michael Bannon

CMO at CSG Partners

Jordan Burg guides CSG Partners’ comprehensive ESOP awareness efforts. By leveraging his broad creative, financial, and entrepreneurial experience, Jordan helps introduce the unique benefits of employee stock ownership plans to closely held companies and their trusted advisors. A marketing professional, Jordan has established CSG as a go-to employee ownership resource through a series of educational initiatives.

His formative career stops at National Football League Films and the Anti-Defamation League fueled his passion for explaining complex concepts and crafting media for diverse audiences. After earning his MBA, Jordan shifted his focus to financial services and joined the corporate marketing team at M&T Bank. As VP for Digital Product Marketing, he led two of the bank’s largest product launches while building a programmatic infrastructure to promote mobile and online services. In five years at M&T, he also managed a number of sponsorship and social media programs.

Jordan joined CSG after leading a multi-year turnaround and disposition effort for The ASCA Group, a New York-based real estate enterprise. He previously served as a marketing committee member for the Buffalo Philharmonic Orchestra and as a member of the United States Presidential Inaugural Committee.

Location Location: New York, New York

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