When a company is sold, it can have major effects on employees, customers, clients, and suppliers. Uncertainty stokes fear in most people, as they wonder about their security and their futures. Even top management can feel as though they failed at their jobs when the company is being bought out. For these reasons, it is important that the messaging and transition planning is handled very carefully and thoughtfully leading up to an acquisition—especially considering that the majority of acquisitions fall through. Announcing the news too early can cause widespread unrest over a deal that never happens
Communication is everything in this situation, but it needs to be planned. Before announcing a single word about the sale of the company, you should have a solid plan in place. A consistent message is critical and the distribution of the information should be carefully coordinated both internally and externally to avoid misinformation and confusion. Your plan should clearly outline intentions, steps, timelines and how the process will affect all parties. Predetermine what will be conveyed by whom and when. Figure out how to address questions that you are unable to answer and consider all potential scenarios for all parties involved. And always remember how critical confidentiality is during this time. You do not want details leaking to the press before you are ready to go public.
Telling Your Employees
Change tends to scare people. Look at the acquisition from your employees’ perspectives and consider what you would want to know. They are likely to be upset and worried about their jobs. Having compassion in this situation can help you navigate difficult circumstances and mitigate unrest. You need to be reassuring, focus on morale, stay positive, and handle things in a manner that prevents people from panicking and jumping ship. When you make the announcement about the sale, schedule a meeting to tell everyone at one time, and ensure that you do not announce anything too soon—or too late. Telling them too soon can cause unnecessary disruption in the event that the sale falls through. Telling them too late risks information leaking out and causing an entirely different kind of disruption. Employees should always be informed before taking the news of a sale public. You don’t want them finding out by reading it in the news. When you make the announcement, you will want to address the following employee questions:
- What is the reason for the acquisition?
- Will we lose our jobs or be laid off?
- Will our jobs change in any way?
- How will this affect our salaries, benefits, and insurance?
- Who will be in charge?
- Are we moving locations?
Additionally, the new leaders should introduce themselves and be part of the communication plan. Seek out opportunities for employees to interact with the new management.
Informing Clients and Customers
A change in ownership can cause concern among your clients and customers. Keep in mind that your competitors will see this change as an opportunity to poach your clientele, so you need to be focused on maintaining good relationships more than ever.
You will need to communicate just as clearly with them as you do with your staff. They will need assurance that the change is a good thing and the reasons why. They will need to know that the transition will be smooth and will not disrupt their relationship with the business and how it serves them. Sending out a formal email to all customers can help you control the message. Make sure to have regular contact with employees and be able to answer all of their questions with correct answers. This means arming them with the right talking points, addressing questions such as:
- How will the acquisition affect them?
- How will they benefit?
- What are the downsides, if any?
- Who will be their contact?
- What changes should they expect?
If customers are not satisfied with the answers they are getting, there should be a clear chain of command in place to escalate any concerns to the right levels of management.
Once the news is out, the new owners should reach out to key contacts right away to introduce themselves and plan to make a personal visit if possible.
Notifying the Public
Make sure you control the press coverage of your big news. Issue a press release to all relevant media outlets addressing the standard questions of who, what, where, when, why, and how. If you conduct a press conference, be ready to answer all potential questions, such as:
- Why are you selling?
- How will the acquisition impact operations?
- Will there be job cuts? In what departments?
- How will employees and customers be affected?
- What can you tell us about the new owners?
- What are the benefits of this acquisition?
- How will the sale change your business model?
- When will the sale be finalized?
- How long will the transition take?
- What are the details of the transaction?
You may also want to prepare a media packet that goes beyond a press release to include executive biographies, photos, company overviews, timelines, and key talking points. This can all help to manage the messaging and tell the story how you want it told. You might even want to have a contingency plan in case the news leaks before you are ready.
If you are planning on taking part in a merger or acquisition, contact our experts at Benchmark International to guide you through every step of the journey, giving you the peace of mind you deserve.
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com
Europe: Michael Lawrie at +44 (0) 161 359 4400 / Enquiries@BenchmarkIntl.com
Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com
ABOUT BENCHMARK INTERNATIONAL:
Benchmark International is a global M&A firm that provides business owners with creative, value-maximizing solutions for growing and exiting their businesses. Benchmark International has handled over $10 billion in transaction value across various industries from offices across the world. With decades of M&A experience, Benchmark International’s transaction teams have assisted business owners with achieving their objectives and ensuring the continued growth of their businesses. The firm has also been named the Investment Banking Firm of the Year by The M&A Advisor and the Global M&A Network as well as the #1 Sell-side Exclusive M&A Advisor in the World by Pitchbook’s Global League Tables.