General ESOP Candidate Profile

An ideal ESOP candidate typically has:

  • A business owner seeking partial or full liquidity
  • An S-Corp, C-Corp, or LLC (not a partnership or professional corporation)
  • A company valued at $10 million or more, or with EBITDA of $5 million or greater
  • An annual payroll exceeding $5 million and 20+ full-time employees
  • Additional capacity for debt
  • A 5-year history of strong earnings or cash flow
  • Controlled and steady growth
  • Strong management team in place

Industries of ESOP Companies

The following industries most commonly use ESOPs:

  • Manufacturing: 21%
  • Professional Science/Tech Services: 19%
  • Construction: 16%
  • Finance/Insurance/Real Estate: 14%
  • Wholesale Trade: 9%
  • Retail Trade: 6%
  • Administrative Support: 3%
  • Agriculture/Mining/Utilities: 3%
  • Holding Companies: 2.4%
  • Transportation: 2.1%
  • Healthcare and Social Assistance: 2%
  • Information: 1.8%
  • Other Services: 1.5%
  • Accommodation and Food Services: 0.6%
  • Education Services: 0.4%
  • Arts, Entertainment and Recreation: 0.2%

(Source: National Center for Employee Ownership)