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The Bloom Organization has completed its first ESOP transaction with a medical practice.  The transaction closed in January 2022 and represents another, often overlooked, option for physicians looking to monetize the value of their medical practice. For those who are unfamiliar, here is a basic overview.

An Employee Stock Ownership Plan (ESOP) is a leveraged buyout that is enhanced by federal tax advantages to the selling physicians.  Using the practice’s cash flow and either/both physician seller notes or third-party debt, the ESOP purchases the practice from the senior physician owners at a fair market value.  The physicians continue to operate the practice and make all business and medical decisions, but the practice is now owned by a trust to benefit the practice employees.  The physicians get cash or stock from the sale (at capital gains tax rates) and the practice becomes a tax exempt entity, making it easier to raise growth capital, open new offices and attract new quality physicians and staff.

In the current environment of physician practice consolidation by private equity, health systems and publicly traded companies, an ESOP can be the perfect option for physicians looking to “take some chips off the table” at capital gains tax rates while maintaining control of operations and decision-making.  For more in-depth information, please see Bloom’s article: Five Reasons to Consider an ESOP

“I believe so strongly in the ESOP model, that I created one for our company in 2017” commented Henry Bloom, Founder and President of the Bloom Organization.  “Now having completed our first ESOP for a medical practice, I’ve even more convinced that this can be a strong option for certain physicians and practices,” said Bloom.

There are currently over 7,000 companies organized as ESOPs providing the opportunity for employees to participate in ownership and profitability.  That number continues to increase in all markets and industries and will continue to grow in healthcare and physician practices.

For more information on whether an ESOP may be for you, or to discuss potential monetization opportunities, please contact The Bloom Organization at (305) 974-0700 or info@bloomllc.com.

ABOUT THE BLOOM ORGANIZATION
The Bloom Organization specializes in healthcare transaction advisory. Our clients turn to us for negotiating the strategic partnerships, joint ventures, acquisitions, leveraged buyouts and other transactions that maximize return. With closed transactions representing more than $5 Billion in market capitalization, our leadership team of professionals has developed unmatched relationships with healthcare providers and industry professionals. We understand that healthcare, more than any other industry, requires a deep understanding of the strategic value of both buyer and seller. We seek to create value for both the short-term needs and long-term goals of our clients.