Jim Sramek, founder and CEO of Midwest Equipment Co., has transferred his ownership to the company’s 72 employees through an Employee Stock Ownership Plan, or ESOP.
Midwest Equipment is a commercial food service equipment distributor in Missouri, Kansas, Illinois and Arkansas. Founded in 1993 and headquartered in Fenton, it operates four primary lines of business: national equipment sales and leasing, regional equipment sales and leasing, service, and parts.
“When I first started thinking about my succession plan, I knew that I didn’t want to sell to anyone outside the company,” Sramek said in a statement. “I spent the better part of this past year working very closely with the ButcherJoseph team in St. Louis to create a trust that would purchase my equity.” The trust allows him to transfer stock ownership to qualified employees at no cost to them and provides him with tax advantages. ButcherJoseph & Co. is an investment bank headquartered in St. Louis that provides advisory services to middle-market companies.
Sramek will remain in his current position, as will President Ann Bueler and the existing Midwest leadership team, the company said.
Earlier this year, Doug Schukar, founder and CEO of DAS Acquisition Co./USA Mortgage, transferred his ownership to employees through an ESOP. USA Mortgage, the largest home lender in St. Louis and in Missouri, with $1.5 billion in loans nationally in 2017, is a division of DAS, a mortgage bank Schukar founded in 2001. Other private companies in St. Louis with ESOPs include McBride Homes, McCarthy Holdings Inc., Triad Manufacturing, S.M. Wilson, Roeslein & Associates and Casino Queen.
In a Business Journal report on ESOPs last year, experts said the reasons owners choose ESOPs, in addition to tax advantages, are to transition ownership, retain company culture, keep employees employed and allow management to participate in ownership. About 6,700 U.S. companies, with 14 million participants and total assets of $1.3 trillion, operated ESOPs in the most recent reporting year, 2015.
