Employee-led Buyouts - Apis & Heritage - Phil Reeves and Michael Brownrigg

Phil Reeves and Michael Brown Rig, co-founding partners of Apis & Heritage Capital Partners, discuss their employee-led buyout (ELBO) strategy that converts lower middle-market businesses to employee ownership.

They detail how they sourced and structured the Blooming Nursery transaction (Cornelius, Oregon), including screening criteria, diligence on agriculture-specific risks like seasonality and weather.

They explain ESOP mechanics, trustee oversight, tax advantages, multilingual employee communications, post-close governance and ownership-culture training, operational upgrades, and their non-sale exit model focused on refinancing principal and monetizing warrants as the business grows.

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Guests:

Phil Reeves: Co-founder, Apis & Heritage

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Michael Brownrigg: Co-founder, Apis & Heritage

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Deal Highlights:

Blooming grows branded, high-quality plants and sells exclusively to specialty garden centers across the western U.S. Demand is tied to seasonal and weather-driven buying patterns which creates diligence and forecasting challenges.

Apis & Heritage found the deal through a brokerage and structured the acquisition as a sale into an ESOP, enabling the founder, Grace Dinsdale, to receive about 90% of value upfront. The ESOP approach protected the land and Grace's legacy by keeping ownership with the company and workers.

The debt transaction put roughly 70 full-time employees plus about 50 seasonal H-2A workers on a path to wealth, with plan tweaks so seasonal workers could earn shares. Post-close, Apis & Heritage added governance, ownership-culture training, finance upgrades, and expanded capacity with new greenhouses. Apis & Heritage received share purchase rights along with their subordinated note which gives them the opportunity for upside.

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