Empowered Ventures Details Unique Acquisition Model
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowCarmel-based Empowered Ventures, an Employee Stock Ownership Plan, is in growth mode. The company has made two acquisitions since launching and plans to deploy up to $60 million throughout the Midwest. Instead of traditional owners or investors, Chief Executive Officer Chris Fredericks says the employee-owned business offers its employees the opportunity to essentially own part of the company through their retirement.
In an interview with Inside INdiana Business, Fredericks explains the company’s business structure and acquisition model.
“An ESOP is a form of employee ownership that is actually fairly wide spread throughout the country,” said Fredericks. “It’s a retirement plan that owns the business and there’s kind of a governance structure in place where we have a public board of directors that I report to.”
Fredericks says employees receive an annual allocation of shares and benefit from the business as it grows in value.
“When they leave the company, they’ll actually receive sizeable checks for their ownership,” Fredericks said.
Over the next five years, Empowered Ventures plans to spend between $40 million to $60 million to acquire more companies.
Last year, the company acquired Ohio-based precision machining company Firstar Precision Corp. in April, and Paramount Plastics Inc., a custom plastics thermoforming company located in Elkhart, in December.
“We finance our acquisitions with our own balance sheet, with our cash and our cash flow, and a great financing relationship,” said Fredericks. “We’re excited to look for more companies and have set aside $40 to $60 million to do that.”
According to Fredericks, Empowered Ventures looks for a long history of success when determining whether to acquire a company.
“We’re looking at the Midwest, B2B companies,” said Fredericks. “The real key is we’re looking for ownership, usually family ownership, that cares a lot about the employees, the customers, and the future of the business, and they’re just not yet quite comfortable with their options in terms of who they want to sell the business to and who they’re going to trust the future of their business with.”
Fredericks says Empowered Ventures doesn’t want to change what’s already working well for the companies.
“We seek to kind of provide a stewardship model, and see that continue for multiple decades to come,” said Fredericks.