Mergers and Acquisitions: Communicate clearly to alleviate fears
A. Many buyers fall into the trap of focusing solely on paperwork when purchasing a DME company. They negotiate the letter of intent. They finalize the purchase agreement. They review the strength of the Seller's claims, billing policies and procedures, focusing on due diligence. This concentration on paperwork is appropriate and necessary. But, for a truly successful purchase, the buyer must consider the paper as only half of the story; people are the other half of the equation.
The employees made the seller's company desirable to you and area key factor in determining the company's future profitability. When news of a sale is public, employees naturally feel uneasy about their future. They'll likely wonder if their work style and personality will blend with yours, or if their position will even be needed under new management. Timing of the announcement is paramount to keeping key employees engaged with their current team. If the seller announces the sale before the buyer is able to discuss their future with the company, fear and trepidation will grow. This uncertainty can lead to employees searching for employment elsewhere or distrusting the new owner and potentially sabotaging the transition.
A coordinated announcement is the foundation to a successful sale. To ensure a smooth and positive announcement, the buyer and seller should meet beforehand to discuss personnel issues, and plan for potential questions and even hostility from the employees. The Seller knows these employees best and should help the buyer develop a communication plan that will work best.
It is imperative for the buyer to speak with the employees immediately following the seller's announcement and be prepared to provide honest, straightforward answers about the transition. While some subjects will be difficult (for instance, questions about layoffs), addressing issues in an empathetic and truthful manner is the only way to alleviate employee fears about a temporarily uncertain future. The strongest foundation for your new DME company is built through coordinated efforts between the buyer and seller.