NOW Health Group has announced it will sell a portion of its stock to employees through an Employee Stock Ownership Plan ("ESOP").
Founded in 1968 by Elwood Richard, NOW Health Group is one of the largest independent, family- and employee-owned manufacturers of natural products, including dietary supplements, foods, sports nutrition, personal care products, essential oils and pet supplements.
The company has seen significant sales growth during the past decade, serving millions of customers globally.
CEO Jim Emme stated, “We realised several years ago that we would eventually need a plan to transfer the ownership and management of the business to
the next generation, or we would risk seeing our business either sold or possibly fail."
"We receive numerous calls to sell our company, but we have worked too long and too hard to build this business and that was not an acceptable option."
"We’ve done very well by this business and we want our workforce and the communities that have supported us all these years to continue to do well by us with a promising future.”
Emme indicated that the company will be owned by a combination of family members and the employees at large.
Through the ESOP, employees are expected to own about 30% of the company.
Emme noted, "Ownership succession was the missing link in our otherwise successful business growth plans."
"We really needed a transition plan that worked for everyone – the Richard family, the management team, the employees, the community and, of course, for our customers."
"This outcome allows us to continue moving forward strongly based on the core values that have always guided our business – transparency, clear communication, community and business success built by our employees."
An ESOP is a form of federally regulated retirement plan that is designed to invest primarily in the shares of the parent company.
Employees who meet broad eligibility requirements will receive shares of the company stock with time and will receive the cash value of those shares upon retirement or departure from the company.
As is the case with most ESOPs in successful companies, the ownership transition will be funded with corporate earnings — individual employees are not investing their own funds.
Emme commented that “Most ESOPs are in smaller to mid-sized firms that are very successful and need a plan to transfer ownership to a future generation."
"Our company is part of a growing trend of successful businesses opting to use ownership to position themselves for ongoing future success."
"The Richard family had discussed moving toward a partial ESOP for many years with the intent of giving back to the hard-working employees. The timing is right for us now."
"What we learned through this process is that ESOPs combine employee ownership, careful communication and education with targeted incentives."
"Many of these companies tend to outperform their competitors in the marketplace in terms of sales growth, employee retention and other performance metrics.”
Michelle Canada-Holda, NHG Vice President of Human Resources, noted that the company already has several of these initiatives in place and plans a strong
communication effort to explain the new ownership changes to employees and their families.
"We are planning a series of employee communications – starting with a kickoff message, written materials, meetings with employees and their families and the formation of an employee owners’ committee — to explain what we’ve done, why and how it will affect everyone."
Canada-Holda added, "We are truly thrilled with this outcome and look forward to many more years of successful operations in the communities where we work while sharing with our employees as we do in many of our engagement programmes.”