Employee stock ownership plans, or ESOPs, have not been a big part of the M&A discussion for many years, but a confluence of recent factors is changing that.

More sellers are turning to the ESOP as an alternative to a traditional M&A transaction, as baby boomers look to sell their businesses, tax rates continue to increase and bankers become more comfortable with the ESOP option. Also, private equity firms are more frequently willing to invest alongside an ESOP transaction, as they look for ways to differentiate themselves while buying into high-quality companies.

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