North River Boats Charts its Future as Newly Formed ESOP
North River Boats, one of the largest private employers in Roseburg, Ore., has new partners – more than one hundred of them. CEO Brent Hutchings informed his entire company of a newly formed employee stock ownership plan (ESOP) that will help him transfer over time a third of his ownership to eligible employees – the vast majority of his team of 131. The structure, Hutchings says, helps share the privately held company’s success with the people who deserve it most, reflecting the true spirit of North River Boats.
“My wife, Chrys, and I want to share the wealth with the people who have worked so hard to build this iconic company by creating a legacy of ownership in the Roseburg community. It feels very much the right thing to do. Our team already behaves like owners, and now they actually are.” said Hutchings. “Creating an ESOP keeps the company I love forever afloat in Douglas County, without selling the business or giving up control to an outside investor.”
Beneficial State Bank financed the multimillion dollar deal, led by Senior Vice President and Relationship Manager Matt Anderson. The bank helped Hutchings achieve partial liquidity while rewarding employees, the average of whom has been with the company more than 10 years, with some more than 30. Each qualifying employee received an initial contribution for 2016 equal to about 16 percent of a year’s gross pay, with additional allocations each year after that they stay with the company.
“I have worked with a lot of banks and have never had an experience like this,” Hutchings said. “Beneficial State played a huge role three years ago by providing the necessary debt financing to enable me to buy the business and again today by providing the debt funding for the ESOP. They really took time to understand our business and to help me design the ideal conservative capital structure for our company.”
Hutchings, who became CEO in 2012 before buying the business in 2014, helped nurture record growth after a vicious downturn and a prior leadership crisis nearly killed the company. With a commitment to community values, respect for employee contributions and dedication to providing a healthy, safe working environment, the company has tripled revenue in the past four years and doubled employment. North River Boats now builds 350 boats a year, ranging from $50,000 recreational boats to $2 million commercial vessels, including Alaskan whale watching boats, pilot and commercial boats navigating international waters; government vessels for the Navy and Coast Guard; and fire, police and other vessels for municipal customers throughout the U.S.
“The success of our diversification strategy and establishment of the ESOP form the foundation of a permanent future for North River Boats in the Roseburg community. Fast-forward 100 years and we will still be here,” Hutchings said.