Erie manufacturing company launches its employee owned stock ownership plan (ESOP) to better reward employees, strengthen the community and continue its family legacy
ERIE, PA – Owners of local industrial furnace company, Onex, have completed a long-planned transition to a 100% employee owned business through the creation of Onex’s new Employee Stock Ownership Plan (ESOP).
Ashleigh and Drew Walters, President and Vice President of Onex, proudly announced the new ESOP to all their employees on Aug. 21 at its inaugural Onex ESOP barbecue. Ashleigh points out, “We knew an ESOP was the right direction for Onex’s future. Being 100% employee-owned rewards our hard-working employees, excites our clients, keeps the business headquartered in Erie, ensures we have the same strong management team and leverages the benefits of tax-free status. When we considered all these positives, it made sense to make this transition now. We’re all very excited about this brand new chapter in the Onex story.”
In 2018 Drew and Ashleigh acquired Onex, Inc. from Ric Walters, Drew’s father. After several years of consistent growth, the Walters began discussing next steps and succession. At 40, the Walters may seem young to be thinking about succession planning. However, as creative leaders, they are always looking for new opportunities to make Onex better. Ashleigh and Drew considered several scenarios including passing ownership to their two young sons. However, family owned businesses often face unique generational challenges. While 30 percent of family owned businesses succeed with the second generation, only 12 percent make it after three generations. Ashleigh acknowledged, “We would love if our boys wanted to work at Onex but we didn’t want that to be our succession plan. We also did not want to wait to address business succession. Onex has some great opportunities for growth right now.”
Employee Stock Ownership Plan (ESOP)
The Walters first learned about ESOPs at a Succession Planning Panel in November 2019. Panelist and executive director of Pennsylvania Center of Employee Ownership, Kevin McPhillips caught Ashleigh’s attention while discussing how employee ownership can transform a business into a tax-free entity. McPhillips commented, “What Ashleigh and Drew have done is extraordinary. They have positively changed the lives of their employees and all of their families forever. At the same time, they have secured the future of their own family and ensured that the Onex name will be an important part of the Erie community and it’s vibrant business life for a very long time. This is what community heroes look like.”
HBK, their accounting firm, connected them with Dan Zugell, Senior Vice President for Business Transition Advisors, who has helped them every step of the journey. Zugell observed, “Ashleigh and Drew decided to pursue an ESOP for all the right reasons. They really care about the long-term well-being of their dedicated employees. They also recognize the possible negative effects of an unrelated third-party sale to the region’s economy where consolidation and job loss are often results.”
Making a Difference
ESOPs are an increasingly popular ownership option. Onex joins more than 285 Pennsylvania companies who are employee-owned. Companies such as Sheetz, Nicklas Plumbing Supply and Voodoo Brewery. Nationally, Onex will be one of the 5,000 other companies that have ESOPs. Before taking this important step, Ashleigh visited another ESOP in New Jersey. She was able to experience the culture of an employee-owned company firsthand. Ashleigh was impressed and commented, “The pride of ownership the employees had for their company was amazing to witness.”
The Walters also presented the idea to one of Onex’s largest clients. Their client agreed it was the right move and would take Onex to the next level.
Ashleigh remarked, “With the establishment of our ESOP, our co-workers become co-owners and we can’t think of anyone we’d rather sell the business to. When Drew and I became owners of Onex in 2018, we saw an opportunity to make a difference in our community and support our fellow manufacturers. Our goal has always been to revitalize American manufacturing. In particular, inspire more people to pursue manufacturing careers and help rebuild Erie’s economy from the inside out. With this ESOP, our families, our community and Onex are stronger and ready for a bright future.”
To learn more about Onex, visit onexinc.com.
The official Erie Times News Press release. https://www.erienewsnow.com/story/42536074/erie-company-becomes-100-percent-employeeowned