Pennsylvania’s Andesa Services, which provides integrated, cloud-based solutions for life insurance and annuity carriers and providers, started 2020 by selling 100% control of the company to its 165 employees through an ESOP.
Andesa’s 165 employees now control 100% ownership of the company through their Employee Stock Ownership Plan
“This is one of the most exciting days of my life and I hope you share my excitement,” Andesa founder John Walker said to the new employee-owners in a video message after the transaction closed.
The tech sector is well known for venture capital and M&A opportunities, and Andesa’s shareholders gave serious consideration to strategic buyers or other outside investors. But they ultimately decided that an ESOP was the only transition strategy that would allow them to truly live up to Andesa’s values.
“The usual ‘innovate, build, scale, sell’ lifecycle followed by most technology companies is not an alternative that aligns with our Andesa Forever vision nor does it honor the commitment Andesa makes to its employees or its clients. An ESOP provides the pathway for employees to share in the success of the company which they work so hard to build and prosper,” wrote Andesa CEO Ron Scheese in a blog post.
Being based in the Bay Area, we here at Menke & Associates are intimately familiar with the tech startup lifecycle that Scheese mentioned. It is easy to see why the idea of building a company and selling it off as quickly as possible to a big fish like Google or Facebook is an attractive one. But it often overlooks the fact that no business concept, no matter how innovative it might be, can succeed without a great team behind it. That is doubly true for service-based companies like Andesa that rely on strong, ongoing relationships with their clients.
Andesa Services, which is now in its 36th year, is proving that you can still build a highly successful and lucrative business, as well as a long-lasting legacy, around a deep commitment to your employees. In fact, just a eight days after announcing that they were now 100% employee-owned, Andesa doubled down on that commitment by announcing a new student loan repayment benefit for their employees.
Congratulations to Andesa Services and its new employee-owners.
If you are considering your possible exit strategies and wondering if an ESOP is the right fit for you and your business, contact us today for a free preliminary analysis.
Menke & Associates, Inc. has helped over 3,500 companies successfully transition to employee ownership. Our holistic ESOP approach enables a positive outcome for the company, its employees and its shareholders. We believe ownership is powerful.
