Capstone Headwaters advised PAQ Inc., an independent franchisee of Food 4 Less grocery stores, on the creation of an Employee Owned Stock Ownership Plan (ESOP). Terms of the deal were not disclosed.
Patricia and John Quinn and business partner Glenn Evans, the owners of PAQ Inc., founded the company together in 1995. They opted to establish an ESOP to sell their shares of the company to their employees ahead of retirement. John Quinn will remain active as chairman of the board.
Bill Cote has been promoted from Chief Financial Officer to President and Chief Executive Officer, and Chris Podesto from Executive Director of Marketing to Senior Vice President and General Manager.
According to Cote, approximately 1,250 employees will become partial owners this year through the ESOP and that number could grow to as high as 1,800 given the number of employees that could potentially meet the qualifications and to be included in the ESOP, placing Food 4 Less in the top 1 percent employee-owned companies nationwide in terms of size.
Roy Farmer, Managing Director at Capstone Headwaters, commented
“By selling 100% of the company stock to an ESOP, the company became Federal and State income tax free, increasing cash flow dramatically and providing the funds to pay owners for their stock. The tax savings also allow the company to be more competitive and continue to be the low price leader in their markets.”
Cote, newly appointed President and CEO of PAQ, Inc., said
“Sinnce we’ve announced this internally, across the board employees are excited about this opportunity. We’re going to feel fresh energy from everybody.”