How are Employee Ownership Trusts financed and valued?

The valuation for an Employee Ownership Trust follows a traditional valuation process, including income-based, market-based, or asset-based approaches.

Sales are usually financed through a mix of:

• External financing: Bank debt, mezzanine debt, or equity.
• Seller financing: The owner is paid over time from company profits.
• Company cash flow: Profits are used to help repay the purchase price.

Unlike some other models, employees aren’t required to buy shares directly or take on personal debt — keeping ownership accessible across the workforce.

For a deeper dive into how the money works in an EOT, take a look at How the money works in an EOT transaction.