TZL 1323

BUSINESS NEWS CS ENERGY COMPLETES LARGEST SOLAR PROJECT IN BURLINGTON COUNTY, NEW JERSEY CS Energy , announced the completion of the Cinnaminson Township capped-landfill solar project for Public Service Electric and Gas New Jersey’s largest electric and gas utility. The 13 megawatt-dcCinnaminson Township site is the largest solar development project undertaken to date in Burlington County. Built over a Superfund site, the 25-acre project is part of PSE&G’s Solar 4 All program, which is concentrating on turning landfills and brownfields green by building solar farms on otherwise unusable sites. The program aims to develop 158 MW-DC of universal solar capacity, enough energy to power more than 25,000 New Jersey homes, and as with every Solar 4 All project, the Cinnaminson project will provide clean,

renewable energy to all PSE&G customers, including those without existing solar systems. The landfill solar sector is oneof themost difficult categories of project sites, and CS Energy has performed development, engineering, procurement and construction services on more than 154 MW of landfill projects to date. Although development of the project over the capped-and-closed Cinnaminson landfill included complex permitting, interconnection, and switchgear coordination, CS Energy was able to deliver the site to the utility on schedule. “By converting unproductive land into a solar power generation plant that provides clean energy to the grid, PSE&G is helping to create a healthier environment and also making solar power available to all of its electric customers,” said Matthew Skidmore, CEO of CS Energy. “Solar 4 All is an innovative program, and

we are proud play a key role in its ongoing success.” One of the primary goals of our Solar 4 All program is to help develop and maintain a strong solar industry that creates jobs and generates economic development in New Jersey,” said Todd Hranicka, PSE&G’s director of solar energy. “So we are proud of our longstanding relationship with CS Energy and pleased that we were able complete another successful project with them.” CS Energy is a national leading integrated energy company that develops, designs and builds optimized projects in the solar, storage and emerging energy industries. CS Energy’s attention to detail and collaborative culture has enabled them to successfully develop and install over 650 MW of solar projects since their early initiatives in 2004.

standard performance is of paramount importance when transitioning your business. Below we have listed a number of items that can affect leverage multiples/financing: ❚ ❚ Customer concentrations ❚ ❚ Consistency and predictability of cash flow ❚ ❚ Sensitization of performance/potential downside modeling ❚ ❚ Free cash flow conversion ❚ ❚ Overall collateral pool PROFESSIONALS. As we stated in our previous article, when working through a succession plan such as an ESOP, it is important for a business owner to surround himself with professionals who are experienced in ESOPs. As a relationship focused bank, we certainly appreciate loyalty amongst long-term business partners. However, utilizing attorneys, accountants, advisors, or bankers that are not regularly involved in ESOPs will not only put the transaction at risk, but will likely create elevated costs in completing the transaction. Executing on a succession plan is typically a once in a lifetime event. Just as a business takes years, often decades, to develop, a succession plan should be well planned for. Surrounding oneself with the appropriate professionals and planning accordingly will position your company for a successful transition to ESOP ownership. Wintrust Financial Corporation is a $34 billion financial services company headquartered in the Chicago area. With our national niche lending groups, including Wintrust ESOP Finance and Wintrust Construction, Engineering & Architecture, our experts have the knowledge and expertise to provide a business owner in the AEC space with a relationship-focused partner and key trusted advisor. PAT STOLTZ and JIM SWABOWSKI can be reached at pstoltz@wintrust.com and jswabowski@wintrust.com. “Surrounding oneself with the appropriate professionals and planning accordingly will position your company for a successful transition to ESOP ownership.”

PAT STOLTZ & JIM SWABOWSKI, from page 11

advisor who deeply understands value and the trustee negotiation process. Valuation multiples are derived from many different inputs. As a selling shareholder, it is important to have a baseline understanding of those inputs and the potential impact on value. See below for a few common factors that may influence value: ❚ ❚ Company life stage/growth prospects ❚ ❚ Overall market position ❚ ❚ Customer/market/geographic diversification ❚ ❚ Majority/minority sale ❚ ❚ Pre-transaction debt ❚ ❚ Interest rate forecast – factored into discounted cash flow calculations ❚ ❚ Public comparisons market “Executing on a succession plan is typically a once in a lifetime event. Just as a business takes years, often decades, to develop, a succession plan should be well planned for.” HOW MUCH LEVERAGE IS BEING CONTEMPLATED/CAPITAL MARKETS APPETITE. When transitioning ownership, maximizing shareholder liquidity is often one of many goals of the selling shareholders. This is not necessarily a poor goal, however, it needs to be understood in the context of the stage in the economic cycle, as well as the ability for the capital markets to deliver. Because EBITDA multiples are a commonly understood cash flow identifier, banks frequently utilize this calculation in determining leverage parameters. It is important to note, most business failures result from weakened performance, coupled with an overleveraged capital structure. Maintaining a financing structure that allows some cushion for sub-

THE ZWEIG LETTER December 9, 2019, ISSUE 1323

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