Pro-Tec has new owners, goes ESOP
MINNEAPOLIS—Tom Hagen, long-time president and owner of independent integration firm Pro-Tec Design, is the latest security executive to choose ESOP (employee stock ownership plan) as an exit strategy.
As of Feb. 1, the company is now 100-percent employee-owned, Tim Ferrian, VP of sales and marketing and former SSN “20 under 40” award winner, told Security Systems News.
“Day-to-day operations of the company don’t change. We all still do what we did in January when the company was owned by Tom. The only difference is that we all now work for ourselves,” Ferrian said.
Pro-Tec joins Tech Systems, another independent integrator, in becoming employee-owned. Both companies are PSA Security owners.
While he was approached multiple times to sell Pro-Tec, Tom Hagen said the ESOP option “emerged as the pathway for me to achieve my goals … of a good future for my family, for Pro-Tec’s employees and for our customers and suppliers.”
The current management team has been working on the ESOP transition for more than a year. That team includes Ferrian; Eva Mach, former CFO who is now president and CEO of Pro-Tec; and Paul Dykema, VP of operations.
Hagen explained that because an ESOP is a tax-free entity, “the money we pay each year in federal and state taxes became available to help finance the transaction. The agreement was structured as a stock sale rather than an asset sale, which would normally be the case, creating meaningful tax savings for me as the seller.”
For the employees, the ESOP “creates energy, excitement and opportunity to make a difference and reimagine what the potential of this company can be," Hagen said.
Ferrian said that in the three weeks since the deal closed, he’s seen evidence that employees feel more ownership in the company. He said he’s excited to see “how the change in our company structure impacts peoples’ view of their role and how that reflection changes the way they interact with our clients.”
Ferrien predicts that “our idea of customer service will change dramatically for the better.”
Based here, Pro-Tec has 45 employees and 400 clients, which include Ashley Furniture, Best Buy Company, Boston Scientific, 3M, Target, State of Minnesota, and the U.S. Department of Agriculture.
Hagen will continue with Pro-Tec as a consultant and as chairman of the board of directors. He will also continue to serve on the PSA Security Network board of directors.