Reijmer/Russell on M&A Directions: Can We Talk? Not Necessarily
When the time comes to break the news, we urge sellers to do so in a public meeting with as much candor and honesty as possible. Being up front with your business and personal reasons for selling will go a long way toward allaying fears and minimizing disruption during the transition of ownership. An all-hands meeting also is a good opportunity to talk about who the new owners are and how the transaction will benefit the company and the people who work for it.
If facilities will be merged as a result of the sale, there may be job attrition. There are no hard and fast rules for sharing this admittedly painful information except to tell employees that affected personnel will be notified in due course. For the sake of workforce stability, sooner is better than later for eliminating redundant positions.
For buyers, going public with the news usually is a cause for celebrating and for welcoming newcomers from the acquired company into the fold. In due diligence, the buyer will already have briefed top accounts about the pending change, perhaps with the help of the selling owner. Post-sale, the objective will be to bring the news in person to as many other customers as possible.
Bringing Suppliers into the Loop
With all due respect to paper merchants and other vendors of consumables and trade services, they should be the last to know that a sale has been closed. The seller who lets a premature word slip to a supplier may quickly find that the story is all over town and that, as a result, discussions with potential buyers have been compromised.
Informing suppliers after the fact usually falls to the buyer, who notifies them of the new ownership structure and the terms that will be expected going forward. At this stage, the buyer establishes credit (if necessary) and compares prices charged to the seller with the prices the buyer is accustomed to paying. If the seller pays more, the buyer's pricing structure should be used. If the seller pays less, that is pricing the buyer will want.