Southern Building Group Successfully Shifts to Employee Ownership Model Through ESOP

Southern Building Group's Journey to Employee Ownership

Southern Building Group (SBG), based in Murfreesboro, Tennessee, has achieved a significant transformation in its structure by moving towards employee ownership through an Employee Stock Ownership Plan (ESOP). This strategic shift signifies a monumental move in the company's 15-year history, providing a unique opportunity for its employees to become stakeholders in the firm.

Founded by childhood friends John Elliott and Chad Davenport, SBG rests on a foundation of shared values and local connections, originating from their experiences growing up in McMinnville, Tennessee. Elliott's exposure to the construction industry began through his father’s construction company, which laid the groundwork for his eventual partnership with Davenport. Together, they established SBG after accumulating significant experience in both familial and larger construction enterprises.

As the company began contemplating succession strategies, they recognized that a typical third-party sale would not resonate with the ethos of SBG nor address the needs of its employees. In a thoughtful and innovative move, they adopted the ESOP structure, which enables an institutional trustee to manage shares for all staff, akin to a retirement program.

Elliott expressed enthusiasm about this opportunity, stating, "We are so excited to offer this opportunity to our employees. This company would not exist without them, and they deserve ownership. This initiative also ensures that SBG will continue thriving for years ahead."

With this transition, all employees of SBG immediately became owners of the company. Importantly, the day-to-day operations and management will continue as usual for the immediate future, maintaining the current leadership to guide the company while simultaneously fostering new leaders from within over time.

The ESOP initiative was facilitated by Reed Kelly and Kyle Kerrigan from Viking Mergers & Acquisitions, who provided guidance on succession planning and transaction execution. Kelly noted, "This structure allowed the founders to achieve their goals while preserving the culture and continuity of the business. Once we suggested an ESOP, the founders were enthusiastic about the idea. We also collaborated with EFS consultants out of Memphis as ESOP advisors."

As Southern Building Group embarks on its new chapter with this ESOP in place, it establishes a framework designed not just for continuity, but for shared success and sustainable growth. The company is positioned to leverage the collective interest of its employees, ensuring that everyone is invested in the success and future of the operation.

About Viking Mergers & Acquisitions

Viking Mergers & Acquisitions, based in Nashville, specializes in facilitating mergers and acquisitions for small to mid-market business owners. Being part of a multi-state network, their Nashville office is backed by one of the Southeast’s largest business brokerage firms. Since its inception in 1996, Viking has successfully executed over 900 business sales, boasting an impressive 85% closure rate at an average of 96% of the market value. For more information or to request a confidential business valuation, visit Viking Mergers.