Growing the ESOP

With a mission to help people around the world live healthier, more productive and more independent lives, Chemonics designs and implements development projects that promote economic growth and higher living standards in many of the world’s developing countries. The work is challenging and requires a team of dedicated professionals who share a commitment to create substantial and lasting impacts.

To both encourage and reward the hard work and dedication required to fulfill its mission, Chemonics compensates its professionals with company stock through its Employee Stock Option Plan (ESOP). Until recently, Chemonics' ESOP owned approximately 10 percent of the company's stock, with the remaining stock being owned by non-employee shareholders as well as key executive employees.

Holland & Knight represented Chemonics in the recent purchase by the ESOP of the remaining 90 percent of company stock it did not previously own. The purchase price was paid via a cash down payment already in the ESOP and promissory notes issued to all of the selling shareholders.

Our M&A and ESOP Teams assisted Chemonics with all aspects of the sale and loan transactions, including the complex subordination and intercreditor agreement entered into between the senior debt holder and the selling shareholders as the holders of the subordinated debt. We also assisted Chemonics in refinancing its outstanding line of credit senior debt, held by a consortium of banks (SunTrust, PNC, Citizens and TD), with a new line of credit senior loan from Silver Oak Lending LLC, a private lending entity. In addition, members of our team advised Chemonics on D&O insurance issues related to the transaction.