How to Tell Employees about the M&A Deal
Following the close of the M&A deal, the first order of business for many deal-makers is to announce the deal. Make the announcement to employees and the media as soon as possible after confidentiality no longer prevents you from talking about the deal.
Despite the best efforts of all involved in the sale process, rumors of a sale will have undoubtedly spread. Therefore, Buyer and Seller alike should immediately take control of the information release in order to disseminate accurate information. Keeping quiet can breed ambiguity, and ambiguity is no one’s friend. Don’t let further rumors fly.
Employees are an important stakeholder in any business, and they deserve to learn about the sale as soon as possible; Seller’s employees probably want to know the identity of the new boss!
Buyer and Seller both need to address Seller’s employees. Those disclosures often occur at separate times, but depending on the specifics of the deal, both parties may want to coordinate efforts and make the announcement at the same time.
Employees should learn about the deal the same day it closes. Stat! After the papers are signed and the wire transfers clear, Seller should assemble the employees (if in one location) and make the announcement. If the closing is finalized after hours, tell the employees first thing the following morning.
The key is to control the message and make sure you’re the one delivering it. If employees are going to hear the news, better they hear official and accurate news from their leader than unofficial and potentially inaccurate secondhand innuendo (masquerading as news from fellow employees).
Don’t wait until all the employees are present. Invariably, someone will be at a sales meeting, out of town, or out sick. Letting the genie out of the bottle and telling some of the employees now is better than waiting a day or two until you can tell all of the employees.
If the company has multiple locations, do your best to assemble as many people as possible and have other locations join by conference call. If a conference call isn’t feasible, direct managers in the other locations should deliver the news as soon as possible.
Be sure to keep the proceedings positive. Selling a business can be a very emotional time; after all, owners often view their employees with a parental eye. Expressing and displaying emotions is wholly appropriate, but don’t let the meeting become downcast.
The announcement should focus on what the employees and new owner will be able to do in the future and not be a pity party for you the Seller as you move on to the next phase of your life. A positive and uplifting message helps eliminate ambiguity and hopefully creates excitement and amity between the employees and the new owner.
Don’t bad-mouth the new owner. Be gracious, supportive, and encouraging, and remind the employees that the new owner can take them to the next level. Focus on moving forward; refrain from dredging up times of yore and refighting past battles, especially if the negotiations and sale process with the Buyer were difficult and arduous. Act like a responsible leader as you hand the baton to the next leader.