ESOP Companies Acquiring Other Companies at a Rapid Rate

Data on ESOP formation suggest that new ESOPs are being created at a slightly lower rate than existing ones are terminated. But that only tells part of the story. Based on a survey of ESOP attorneys, we estimate that between 300 and 400 companies are acquired by ESOP companies annually. Two companies, Davey Tree and Ferrellgas, have been the most active acquirers, with more than 200 acquisitions between them over the last decade. While we estimate that about 100 of the target companies employ 20 or fewer people, the remainder look much like companies that might otherwise have established ESOPs themselves.

The numbers help explain why ESOP participant and asset numbers have been growing even though the number of plans has declined.

The NCEO maintains a list of more than 300 acquisitions that have been publicly announced. For details, contact Corey Rosen at [email protected].