Now Health Group announced its intent to sell a portion of its stock to employees through an Employee Stock Ownership Plan (ESOP), to preserve local ownership and strengthen the company’s prospects.

The company was founded in 1968 by Elwood Richard, and manufactures dietary supplements, foods, sports nutrition products, personal care products, essential oils, and pet supplements. NOW’s products are sold in stores across the U.S., Canada, online, and in more than 100 countries worldwide.

“We realized several years ago that we would eventually need a plan to transfer the ownership and management of the business to the next generation, or we would risk seeing our business either sold or possibly fail,” said Jim Emme, CEO. “We receive numerous calls to sell our company, but we have worked too long and too hard to build this business, and this was not an acceptable option. We’ve done very well by this business, and we want our workforce and the communities that have supported us all these years to continue to do well by us with a promising future.”

Emme indicated that the company will be owned by a combination of family members and the employees at large. Employees are expected to own about 30% of the company.

“Ownership succession was the missing link in our otherwise successful business growth plans. We really needed a transition plan that worked for everyone: the Richard family, the management team, the employees, the community, and, of course, for our customers. This outcome allows us to continue moving forward strongly based on the core values that have always guided our business: transparency, clear communication, community, and business success built by our employees.”

An ESOP is a federally regulated retirement plan that is designed to invest primarily in the shares of the parent company, and about 7,000 ESOPs exist in the U.S. Employees who meet eligibility requirements will receive shares of the company stock over time and will receive the cash value of those shares upon retirement or departure from the company. The ownership transition will be funded with corporate earnings; individual employees will not invest their own funds.  

“Most ESOPs are smaller to mid-sized firms that are very successful and need a plan to transfer ownership to a future generation,” said Emme. “Our company is part of a growing trend of successful businesses opting to use ownership to position themselves for ongoing future success. The Richard family had discussed moving toward a partial ESOP for many years with the intent of giving back to the hard-working employees. The timing is right for us now. What we learned through this process is that ESOPs combine employee ownership, careful communication, and education with targeted incentives. Many of these companies tend to outperform their competitors in the marketplace in terms of sales growth, employee retention, and other performance metrics.”

Michelle Canada-Holda, vice president of human resources at Now Health Group, said the company has formal plans to communicate the ownership change to employees. “We are planning a series of employee communications, starting with a kickoff message, written materials, meetings with employees and their families, and the formation of an employee owners’ committee, to explain what we’ve done, why, and how it will affect everyone. We are truly thrilled with this outcome and look forward to many more years of successful operations in the communities where we work while sharing with our employees as we do in many of our engagement programs.”