How does the EOT sale process work?

While each deal is different, most follow a similar process:

1. Valuation: An independent, third-party determines the business’s fair market value.
2. Trust design: A purpose trust is created to hold company shares on behalf of employees and codify its purposes.
3. Sale: The owner transfers shares to the trust.
4. Repayment: The sale price is typically financed through the company’s cash flows and/or external capital.
5. Governance: A trustee board ensures the company continues operating in accordance with the trust’s purposes.