M&A ADVISOR TIP: What happens to employees after I sell?

Business owners often come to us concerned about employee jobs and retention issues after a sale. They worry that selling their business will lead to job losses if certain positions become redundant.

However, buyers today are often just as focused on retention issues. Your experienced talent can be a key driver of enterprise value, and buyers want to make sure these people stick around.

Your management team is the highest priority retention target, and deal structures will often involve some sort of retention bonuses or shareholder equity options for top leadership. Many buyers, particularly private equity, will consider management retention incentives a routine component of the deal.

While the remaining employee group is less likely to receive financial incentives, buyers ARE looking at culture, communication, and change management. Today, HR is more likely to be involved early in the process in an effort to help the organizations blend culture rather than impose new corporate will.

For advice on human resource issues in business sales, mergers and acquisitions, contact Al Statz in Exit Strategies Group’s Sonoma County California office at 707-781-8580 or alstatz@exitstrategiesgroup.com.

Exit Strategies Group is a partner of Cornerstone International Alliance.