A friend of mine has been approached by a PE company that wants to buy her company. Her employees are vital to the continued success of the company and she is concerned that they might leave when they find out about the change of management.
Would it be better to tell them ahead of time that she is thinking about selling? Give them an opportunity to put in their own bid? Wait to inform them after the transaction is complete?
Each method has its own pros and cons and I would be interested in hearing from someone who has successfully navigated this transition and any advice you might have..
Thanks!
Are there best practices for telling your employees you are selling?
by a searcher from Rice University - Jesse H. Jones Graduate School of Business
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Better to let people focus on their day to day. One story to illuminate this:
My colleague had quietly sold a small, niche manufacturer. The business was owned/run by an older gentleman. The buyer had agreed to close on a Thursday. The buyer's HR team needed to sign up the new employees onto the buyer's benefits plans on Wednesday. Warren agreed to speak with the owner and his employees to answer questions on Tuesday, so people would feel "safe", understand they would have more career opportunities, better benefits, etc. The seller called everyone into the conference room and simply said, "Hello everyone this is Warren from True North Advisors Group who has been helping me with the business. He has something to tell you." Seriously, the seller could not emotionally say the words, "I sold the business". Warren quietly made the announcement and explained how the process would work.
Warren later heard from numerous employees that they were relieved that the business was in good hands, as no one else in the company could run it if the owner simply left/died.