Trust and Transparency: the T&T of M&A
They say that candor is refreshing. In M&A negotiations, it can be a blast of pure oxygen. Let me tell you the story.
I was with a selling client during the first visit by a potential buyer and his team. The buyer understood the sensitivity of situations like this: strangers in the plant, guys in suits walking around, nervous questions from everybody. He asked my client straight out: “Who do your employees think we are, and why do they think we’re here?”
My client replied, “Everyone knows who you are and why you are here. We let our team know that this would happen eventually. Being open about everything is just a part of our culture.”
Well, the buyer was surprised, but the effect on the discussions that followed couldn’t have been more positive. Not only did the buyer personally appreciate the seller’s frankness—he also saw in it a powerful clue to the seller’s business integrity. An owner this trusting of his employees—enjoying their trust in return—probably could be counted on to deal with a buyer in the same good faith.
The seller’s management presentation to the buyer was no different. He included not just his sales representatives and senior people, but mid-level employees who typically aren’t asked to take part in meetings of this kind. It was all by way of assuring the buyer that transparency was SOP in this company and that there would be nothing to blindside any employee affected by a deal.
Admittedly, this degree of openness is unusual in printing businesses preparing themselves for sale. All M&As are sensitive, and there can be many good reasons for sharing information only on a strict need-to-know basis while negotiations are under way.
A little knowledge, after all, can be a dangerous thing. Employees with an incomplete understanding of what’s going on may spook themselves into leaving, taking years of valuable experience with them. Ill-timed rumors reaching customers and suppliers can threaten those relationships. If 100 percent transparency like my client’s isn’t present in other companies, it implies no criticism of anyone in charge. What my client does is just a different and very refreshing approach to running a printing business in an extremely competitive marketplace.
