Willmeng Construction, based in Phoenix, has officially transitioned to a 100% employee-owned firm, making it the second-largest employee-owned general contractor in Arizona. The company, which employs more than 350 individuals, announced the change following the launch of its employee stock ownership plan (ESOP) last month.

Despite interest from other companies for potential mergers or acquisitions, CEO James Murphy emphasized the company's desire to preserve its culture and invest in its people. "We have every interest in continuing to partner with these outstanding firms, but it was important to us to maintain our culture and preserve our offering to our clients by continuing to invest in our people," Murphy stated.

The shift to an ESOP allows employees to collectively own shares in the company, a popular option for businesses seeking succession plans without losing control. Brad Werner, a leader at the Milwaukee-based Wipfli accounting firm, notes that ESOPs are attractive to businesses with stable cash flows and low debt, offering a smooth transition while providing owners with a financial exit strategy. However, he also warned that ESOPs come with the added challenge of debt and high administrative costs.

Willmeng declined to disclose details regarding debt or its specific ESOP transition, but Murphy emphasized the importance of retaining top talent and ensuring long-term succession planning. "Our culture and foundation are built upon great outcomes for our clients. To consistently do that, you have to recruit and retain the best in the industry," Murphy said. "Transitioning to an ESOP is a way to double down on expanding upon that formula of success — retaining the most talented, caring builders in the industry."

Tempe-based Sundt Construction remains the largest employee-owned general contractor in Arizona, employing 3,900 individuals and ranked 30th nationally among all ESOP firms.