In the initial months following the sale of 100% of its common stock to its employees through establishment of an employee stock ownership plan (ESOP), evidence abounds that the move has been a good one, for both employees and customers of Regent Surgical Health.
Regent, which started out as an employee-owned company with 14 founders, had been operating as a small partnership for the past 15 years. Establishment of the ESOP in late 2016 has served the company’s interests by ensuring productive business continuity as some of its founders anticipate retirement, while also enhancing employee motivation, reassuring customers and creating a tax advantage.
“The response from our employees to the ESOP has been overwhelmingly positive,” said Regent Co-founder and Chairman Tom Mallon. “We chose to sell the business to the employees because they are our true partners. Now, as owners, they are embracing the opportunity to drive the company’s continuing success, demonstrating a high degree of motivation to execute and evolve our successful business model.” Employees throughout the organization believe that Regent’s new ESOP structure complements their values-driven culture, best summarized by the R.I.S.E. program, a company-specific set of values that embody Respectful Caring, Integrity, Stewardship and Efficiency.
Similarly, Regent customers have been very receptive to Regent’s move to the ESOP. According to Regent CEO Chris Bishop, establishment of the ESOP enables the company to remain nimble and flexible, which is a positive differentiator for Regent, particularly in an industry marked by dramatic consolidation and change. “Regent is not encumbered by a restrictive corporate parent or Wall Street shareholder,” noted Bishop. “Most importantly, we feel this solution allows us to continue improving our service to best meet our hospital and physician partners’ needs, even as they adjust to the demands of an evolving healthcare marketplace.”
Finally, Regent’s move to an ESOP sets the company up for financial advantages as well. “We were able to finance the ESOP through physician partners, friends and Regent management, without additional outside capital, which gives us several major benefits, said Matt Lau, Regent’s Chief Financial Officer. “Because an ESOP is a tax-deferred investment vehicle, it frees resources to better serve our partnerships. In addition, as a private company versus a public company, we retain more flexibility to structure creative partnerships with health systems.”
If you are looking to develop an independent physician partnership or joint venture with a leading hospital or health system, Regent’s team can help. Regent has a 15-year track record of developing partnership models that align the interests of all parties for long term success. Contact Regent today to learn more.