Announcing a Sale to Employees | O'Keeffe & O'Malley

Announcing a Sale to Employees

Sep 17, 2021

You’ve accepted an offer to sell your business, and you’re almost at the end of the sometimes stressful and arduous task of due diligence, nearing the close of the deal. Now it’s time to make the announcement to your employees.

Second to due diligence, this is often the most stressful part of a client’s journey, simply because they don’t know what to expect. We’re often called on for advice about the best way to handle this very important milestone. The way in which the announcement is handled will set the stage for the future and cannot be underestimated.

Here are some tips, based on years of experience in counseling our clients:

  • Timing – Unless there are special circumstances, we suggest holding the meeting right after the close of the sale. Select a time in late afternoon, late in the week, when everyone can attend, so all employees hear the information at once. If there are multiple locations, host a video conference or have others make the announcement at the exact same time in each office. You want to control how the information is presented, and you don’t want employees hearing it from one another. Make it festive and provide snacks if that’s what it takes to get everyone together. Often a buyer will want to visit with a few key employees prior to the sale. We recommend that this be done in the two weeks prior to closing once the contingencies have been eliminated.

  • Positive Tone – Keep the conversation positive and upbeat. Change always creates some level of anxiety in employees, and you’ll want to alleviate as much of that as possible from the start. Employees need to hear that this is an exciting time for the company to grow and that what is good for the company is good for them.
  • Participants – We suggest the seller and new owner make the announcement together. This demonstrates unity and shows that there will be a smooth transition. It’s best if both parties speak and answer questions. The seller should explain how the transition will take place and how long he/she intends to stay on board, and in what role. The new owner should outline their vision and strategic growth plan to generate some excitement.
  • Job Security – This is the number one fear among employees – will they lose their jobs? To the extent that it is true, assure employees that their jobs are secure.
  • Pay – Explain what will happen with pay. Tell whether it will stay the same or increase and if the method of payment will change in any way.
  • Benefits – Let them know whether benefits will stay the same or improve.
  • Culture – We work hard to find buyers for our clients that share similar philosophies and ideas about culture so they can tell their employees to expect the same after the transition.
  • Questions – Allow time for questions and answers, but be prepared if there are only a few. It will take time for employees to process the information. Tell them that you will seek them out individually (if that’s realistic), and do that as soon as possible so you can address any fears or concerns. If you wait for them to come to you, it may never happen, and they may seek information from unreliable sources. Talking to each person individually will lessen the outbreak of gossip and rumor

Taking time to plan and carefully orchestrate the announcement will help ensure a smooth transition and offer comfort to your employees. Then it’s time to toast the new ownership and have a party!

For more information, contact our team.