Like many leaders in plumbing distribution, I’ve spent my career in owner-operated businesses built on relationships. This industry isn’t driven by spreadsheets alone, it’s built on trust, service and people who take pride in doing things the right way.

As ownership transitions accelerate across our industry, more distributors are asking a fundamental question: What is the right exit—for me, my employees and my customers?

Private equity, strategic buyers and family succession all have their place. But there is another option that deserves far more consideration than it often receives: selling to an Employee Stock Ownership Plan (ESOP), particularly to an existing ESOP-owned distributor.

Barry Company is employee-owned, and I’ve seen firsthand how ESOP ownership changes the way people think, lead and make decisions. More importantly, I’ve seen how it can provide sellers with something increasingly rare in today’s market: a true legacy outcome.

What Makes an ESOP-Owned Distributor Different

At its simplest, an ESOP allows employees to earn ownership over time through a retirement plan. In practice, that ownership creates powerful alignment.

Employees don’t just work for the company—they work on it.

According to the National Center for Employee Ownership (NCEO), there are approximately 6,500 ESOPs in the United States covering more than 14 million employees, with a strong presence in privately held, middle-market companies like plumbing and HVAC distributors.

NCEO-summarized research shows that ESOP companies:

• Grow 2 - 4% faster annually than comparable non-ESOP peers
• Experience 25 - 50% lower voluntary employee turnover
• Demonstrate greater resilience during economic downturns, with fewer layoffs and faster recoveries

In a margin-sensitive, service-driven business-like distribution, those advantages compound over time.

At Barry Company, employee ownership shows up in everyday behavior—inventory discipline, customer responsiveness and a shared sense of accountability. When employees are owners, waste feels personal, service feels intentional and long-term thinking becomes second nature.

Long-Term Thinking Over Short-Term Optimization

One of the most important distinctions between ESOP buyers and other acquirers is time horizon.

Private equity firms are designed to maximize returns within a defined investment window. Strategic consolidators often need to centralize decisions, standardize systems and extract synergies quickly.

ESOP-owned companies operate differently.

Because employees’ retirement outcomes depend on sustainable enterprise value, decisions are made with durability in mind. Capital is deployed carefully. Growth is pursued deliberately. Risk is evaluated through the lens of permanence rather than exit timing.

That doesn’t mean ESOP companies avoid changing—it means they manage it responsibly.

Why Sellers Should Consider Selling to an Existing ESOP

When owners evaluate a sale, valuation understandably dominates the conversation. But in practice, price is only one part of a successful transaction.

Selling to an existing ESOP offers several advantages that sellers often appreciate most after the deal closes.

Preserving Legacy

For many founders, their company represents decades of work. Selling to an ESOP allows that legacy to continue under the stewardship of the people who helped build it. Brands remain intact. Cultures are respected. Local decision-making endures.

NCEO data shows ESOP companies are significantly more likely to remain independent long-term rather than being resold or broken apart. For sellers who care about what happens next, that matters.

Stability for Employees and Customers

Plumbing distribution is a relationship business. Customers value consistency. Employees value security. Communities value locally invested employers.

ESOP buyers are structurally aligned to provide that stability. During the COVID downturn, ESOP companies tracked by NCEO were far less likely to implement layoffs than non-ESOP peers—a reflection of long-term ownership thinking, not short-term reaction.

Fair Value with Transparency

ESOP transactions are governed by independent valuations and fiduciary oversight. While an ESOP buyer may not promise the highest headline multiple, sellers receive fair market value grounded in reality, not financial engineering.

For many owners, that trade-off results in a more durable, financeable and values-aligned transaction.

Thoughtful Integration

Existing ESOP operators understand that integration risk destroys value. Growth is approached deliberately by preserving local leadership, respecting regional dynamics and protecting customer relationships

Flexible Transition Paths

Many sellers want to remain involved during a transition period. ESOP buyers often welcome that continuity, recognizing that knowledge transfer and relationship stability benefit employees, customers and the business itself.

Barry Company’s ESOP Perspective

As president of an ESOP-owned distributor, I don’t view employee ownership as a slogan—it’s a responsibility.

We are stewards of our employees’ retirement futures. Every decision we make—capital investments, acquisitions, pricing discipline—ultimately affects people who rely on this company for long-term security.

That responsibility shapes how we evaluate growth opportunities. We look for businesses with strong cultures, ethical leadership and pride in service. We believe the best partnerships are formed when values align before numbers do.

A Different Way Forward

Selling a plumbing distribution business is one of the most consequential decisions an owner will ever make. There is no universal answer.

But for owners who care deeply about their people, their customers and the legacy of what they’ve built, an ESOP buyer—particularly an experienced ESOP operator—offers something increasingly rare:

A future that honors the past while building responsibly for the next generation.

As our industry continues to evolve, employee ownership isn’t just a succession option—it’s a competitive advantage and a long-term stewardship model worth serious consideration.