This story originally appears in the Fort Worth Report
On Friday nights across Texas, thousands of students take the field under stadium lights. They run onto turf fields and tracks to compete in facilities that become gathering places for entire communities. For more than four decades, a Fort Worth company has helped build many of those places.
Paragon Sports Constructors began as a family-owned paving company building and surfacing running tracks in 1985. Today, it builds and maintains athletic facilities ranging from synthetic turf and natural grass fields to running tracks, courts and complete stadium projects.
When William Chaffe, now President and Chief Operating Officer at Paragon, and a group of partners took over the company in 2009, it had about $9 million in annual sales. Since then, that number has grown to more than $120 million.
"We didn't want to be the biggest. We wanted to be the best," said Chaffe.
Protecting what they built
Across the construction industry, consolidation has given business owners more opportunities to sell to private equity firms or strategic buyers. Paragon had options, too.
But Paragon’s leaders believed the company’s value wasn’t just in its equipment, contracts or balance sheet. It was also in the longtime employees who had spent decades working together and developing the expertise to build tracks, install fields and maintain relationships with customers year after year.
So instead of selling the business, Paragon's leadership team chose to share ownership with the people already helping build the company. In January, Paragon became a 100% employee-owned company through an Employee Stock Ownership Plan, or ESOP.
"We are Texans building for Texans, with ownership at every level," said Chaffe.
That means ownership isn't limited to executives sitting in Paragon's Fort Worth office. Eligible employees can build a financial stake in the company over time through the retirement plan, without having to purchase shares themselves. For Chaffe, that distinction matters.
"It's not just leadership that owns the company," he said. "Every single person on the job site has a stake."
Turning employees into owners
When Chaffe and Paragon’s leaders shared the news with employees, the reaction showed what the change could mean beyond the company’s balance sheet. As employees began to understand what ownership could mean for their long-term financial futures, some became emotional. One longtime employee described the benefit as feeling like a second retirement plan outside of savings.
That wealth-building opportunity is one reason employee ownership has become an increasingly discussed succession option for privately held businesses.
An ESOP is a qualified retirement plan that owns stock in the company on employees' behalf. Rather than employees writing a check to buy part of the business, eligible workers accumulate ownership benefits over time.
Considering an ESOP for your company?
An employee stock ownership plan can help you prepare for your business’s future while giving eligible employees the opportunity to share in its long-term success. The J.P. Morgan ESOP Advisory Group works with you to evaluate ESOP benefits, considerations and potential financing options.
Making the transition
Paragon knew what it wanted its next chapter to look like. The question was how to get there.
The company turned to J.P. Morgan, working with its ESOP Advisory team to evaluate its options and navigate the financial and structural decisions involved in the transition.
"Paragon had a clear vision," said Doug Dell, a commercial banker on J.P. Morgan's ESOP Advisory team. "They wanted to protect their culture, preserve independence and reward the people who built the company. Our job was to bring the full depth of our ESOP expertise to help them transition with confidence and set the foundation for long-term success as a 100% employee-owned business."
“Fort Worth is growing at an incredible pace,” said Phillip Wiginton, North Texas Market Executive for J.P. Morgan Commercial Banking and a member of JPMorganChase’s Fort Worth Market Leadership Team. “For many established companies like Paragon, growth isn't only about getting bigger. It's about retaining talent, preserving institutional knowledge, and making decisions today that position the business to thrive for the next generation."
The next chapter
Six months into employee ownership, life at Paragon looks exactly as it did before.
The same management team remains in place. Employees are still building fields and tracks. Customers are still working with the people they know.
Behind the scenes, however, something fundamental has changed.
This fall, employees will receive their first statements showing the value of their ESOP shares. The company is also investing in employee education to help workers with different levels of financial literacy understand what ownership means for them.
And for a company whose business is literally building places designed to last, Chaffe sees a certain symmetry in the decision.
“Paragon wouldn’t be the company it is today without the people who have helped build it. Now our employees have the opportunity to share in where it goes next. That’s the legacy we want to leave, and we couldn’t be prouder of what we’re building together.”