How to Tell Your Team That Your Company’s Getting Acquired

Have you just received news that your company is getting Acquire’d (yay!) but you’re unsure how to break the news to your team? Or maybe you’re just curious about the best way to handle this delicate situation when the time comes. 

In this article, you’ll learn how and when to tell your employees that your company’s getting acquired without causing any undue stress or confusion. 

Disclaimer: When it comes to what you can say and when, always default to the NDA you signed with the buyer. You don’t want to get in trouble for revealing confidential information too early and jeopardizing the deal.   

How Do You Announce Your Company’s Acquisition to Employees? 

An acquisition announcement impacts employee morale and productivity. After all, the news might come as a shock. Your employees may feel uncertain or anxious about what the future holds. By handling the situation openly and tactfully, your team will feel more confident as they navigate this new chapter. 

Start With Why

Sharing your acquisition news calls for more than just a press release to the public and a quick email to your team on closing day. Instead, build a narrative about the acquisition that creates excitement – not anxiety – in those that hear about it. Why is this acquisition happening? 

Simon Sinek says “a good WHY statement is simple, easy to understand, and reflective of the person to whom it belongs.” As the founder of your business, it should be reflective of you. Why are you selling your company? Or in Simon’s words, “Why are you doing what you’re doing? WHY is not about making money. That’s a result. WHY is a purpose, cause, or belief.”

Do you want to move on to your next startup venture or spend more time with your family? Are you burnt out and need to recover? Or are you selling because you want your business to grow beyond your capabilities? Your WHY should be about more than just cash.

Your story should encourage your team to root for your company’s new direction. Why should employees, stakeholders, and the public be excited about it? This part of the narrative can be a bit trickier, especially if you expect some fallout from the acquisition. Focus on the benefits and how they align with your company’s overall mission to help customers.

For example, if the acquisition will expand your business’s reach, introduce new products or services, or leverage new technology to improve its offerings, focus on these positives. By presenting a clear and optimistic vision for the future, you can build momentum and support for the acquisition, even in the face of potential challenges.

Be Transparent and Honest

When you communicate the news with your team, be as honest as your NDA permits. That doesn’t mean creating panic every time you receive an LOI. But once you pass due diligence and sign the asset purchase agreement (APA), share the news with your team.

Provide as much detail as possible about the deal and its implications, being upfront about potential changes, like layoffs or restructuring. Employees left in the dark may spread rumors that weaken morale. Don’t let poor communication erode employee engagement and loyalty. 

Acknowledge your team’s feelings of uncertainty and anxiety. Let them know you’ve listened to and understand their concerns. 

Being honest isn’t just for your team’s sake, but also for your reputation within the startup community. Speculation, rumors, and distrust within your team can harm your reputation and impact future business opportunities. Think negative Glassdoor reviews, a Twitter fiasco, or employees going to the press. Instead, lead your team through the transition.

Emphasize The Positives

While there may be unknown challenges ahead, emphasize the positives of the acquisition. How will this acquisition benefit your employees? Maybe it brings opportunities for growth, access to new resources and talent, or the potential for greater financial stability. If your employees own shares in the company, the value of those shares could rise, making them money on the deal. 

The acquisition might also open up new opportunities for career growth and development, both within the company and industry. Employees may be able to work on new projects, gain access to new mentors, or get exposure to new markets and industries. By highlighting these benefits, you can help employees feel more optimistic about the acquisition and its implications and keep their spirits high. 

Address Potential Impacts on Jobs and Roles

The acquisition could change job roles, responsibilities, or even headcount. Sometimes everyone stays on, but sometimes layoffs are inevitable. On average, roughly 30 percent of employees are deemed redundant after a merger or acquisition in the same industry. 

Be upfront about the potential impacts and explain why these changes are happening. Is there an overlap in roles with the acquiring company? Is the buyer shifting your company’s strategy? Employees don’t want to be caught off guard, so help them prepare for the transition. 

Layoffs are the worst-case scenario for your employees, so if you need to have this conversation, plan for it. Work with your HR team, the buyer, and any relevant stakeholders to clarify at-risk positions and the timeline for changes. 

For employees impacted by the layoffs, offer support and resources. For example, explore whether internal transfers to a department at the acquiring company are possible. If not, help your employees find new job opportunities and share resources that help manage the stress of the situation. 

Invite Questions and Feedback

Give your team ample opportunity to ask questions and share their thoughts and concerns. An acquisition can be difficult for employees as they face uncertainty about their job security, roles, and the company’s future. Open communication can help alleviate some of this anxiety and help employees understand what to expect during and after the acquisition.

Schedule a Q&A session (more on that later), create a dedicated feedback channel or forum, or simply be available to chat one-on-one with team members. By listening to your team and being responsive to their needs, you’ll build their confidence during this time of transition.

Create a Communication Plan to Announce Your Acquisition 

Most of the time, you won’t be able to share the details of your acquisition with your employees until the deal has closed. By that time, you’ve hopefully aligned with all the relevant stakeholders on the messaging and mapped a communication sequence. How exactly do you announce your company has been acquired?

1. Internal Announcement to Employees

Once you’re ready to share the news with your team, do so clearly and tactfully. While the best way to do this is in person, that isn’t always an option. Instead, you can host a town hall meeting, send a detailed company-wide email, or record a video message where you share the details of the acquisition and what it means for the company and your employees. 

How to Write a Company Acquisition Announcement

1. Start with the why: Begin by explaining why you decided to pursue the acquisition and what it means for your company’s overall strategy and goals. 
2. Discuss the details of the acquisition: Provide as much information as possible about the terms of the acquisition, including any financial details or changes to the company’s ownership structure.
3. Address potential impacts on jobs: Be transparent about any potential changes to job roles or responsibilities and reassure employees that you will work to minimize any negative effects as much as possible.
4. Emphasize the positives: Highlight new growth opportunities, expanded resources, or the potential for increased value for shareholders. 
5. Add a call to action: Encourage employees to ask questions or share their thoughts and concerns about the acquisition. Foster an open dialogue to ensure everyone is on the same page.

Here’s an example acquisition announcement that a startup founder might send:

Hi everyone,

I’ve got some exciting news to share: [Your Company Name] is being acquired! Before we celebrate this milestone together, I want to take a moment to explain what this means for you, the company, and our customers. 

I’ve been running [Your Company Name] for five years now and decided to pursue this acquisition because I believe it will provide our company with greater resources and opportunities for global growth. Joining forces with [Acquiring Company or Buyer Name], I’m excited about finally achieving our long-term goals of expanding our product offerings and serving customers all over the world.

The specific terms of the acquisition are still confidential but know that we’ve negotiated a fair deal that will benefit our customers, our stakeholders, and our new owner. While I will be passing the baton, the change in ownership won’t impact [Your Company Name]’s day-to-day operations or the services we provide to our customers.

This is a great opportunity for [Your Company Name] to continue to grow and thrive and both myself and our new owner are excited to see what the future holds. We believe that this acquisition will ultimately lead to increased value for our customers and a bigger market share. 

I know that some of you may be concerned about potential impacts on jobs, so I want to be transparent about what to expect. While there will be some changes to roles and responsibilities as a result of the acquisition, we’re committed to minimizing any negative effects and ensuring that everyone is treated fairly and respectfully. I don’t have a definitive timeline yet, but I will share more details as they become available.

Please feel free to ask questions and share your thoughts and concerns about the acquisition. I want to foster an open dialogue to ensure that everyone is on the same page and feels comfortable with this new chapter in our company’s journey.

Thank you for your continued support and dedication – we couldn’t have done this without you! I can’t wait to see where this acquisition takes [Your Company Name].

Cheers,

Your founder and CEO

2. Q&A Sessions

To address employee questions, schedule one or more Q&A sessions where you can provide answers and clarify points they’re unsure about. Whether you’re hosting these sessions in person or online, ensure your employees feel comfortable sharing their thoughts. 

Questions Your Employees Might Ask About Your Acquisition

• Will there be any changes to our job responsibilities?
• Will there be layoffs? If so, when can we expect them?
• What will happen to our salaries and health benefits?
• What will happen to our pension plan, 401(k), or other retirement benefits?
• What will happen to our equity or stock options?
• Will we be moving to a new location?
• Will there be any changes to our team or reporting structure?
• How will the acquisition impact our customers?
• Will we be integrating with the acquiring company’s systems or processes?
• What is the long-term strategy for the company?
• Will there be any changes to our company culture or values?
• What was the reason for the acquisition?
• What is the timeline for the integration process?
• How will the acquisition impact our department specifically?
• Will there be any changes to our company’s branding or marketing strategy?
• How will the acquisition impact our company’s financials?
• What will happen to our company’s leadership team?
• Will there be any changes to our product or service offerings?

Prepare the answers to all of these questions and any others that you think may come up during the Q&A session. If there’s anything you’re unsure about, ask your leadership team or the buyer for additional insights. If you don’t have the answer to a question during the Q&A, be honest and tell your employees that you’ll need to get back to them with more information.

3. Team-Specific Training

Depending on the structure of your company, you may also need to create team-specific messaging or training materials to help different departments understand how the acquisition will affect their work. Schedule individual meetings with managers and deeper training sessions with departments that need to adapt to new systems or processes.

• Workflow guides: If the acquisition will result in changes to the way your employees handle certain processes or workflows, develop step-by-step guides (with screenshots or videos) that they can refer to as they adjust to the new way of doing things. 
• System or software training: If your acquisition involves switching to new software or systems, provide online tutorials or webinars on how your employees can use these new tools effectively. 
• Messaging training: If your company’s branding is changing post-acquisition, help employees understand how they should communicate the new brand identity, including brand positioning, values, and key messaging. Provide training on how to craft messages that align with the new branding, such as writing emails, social media posts, or other communications. 
• Cultural integration training: Use role-playing exercises and case studies to help employees navigate cultural differences like communication style and decision-making. This type of training is often overlooked, but a decade of research from McKinsey shows that organizational issues, like cultural differences, account for almost 50 percent of the failure of mergers and acquisitions to meet expectations. 

The goal is that every team or department feels prepared for the changes. By providing targeted messaging and training materials, you can help everyone feel more confident in navigating the transition and minimize any disruptions to their productivity or workflow. 

4. Ongoing Communication

Finally, keep your employees informed throughout the transition process. Regularly update your team on the progress of the acquisition, any changes to company policies or procedures, or opportunities for them to give feedback. In other words, keep the lines of communication open.

Overall, telling your team that your company has been acquired is a big deal, but don’t be nervous! Think of it as an opportunity to build trust, celebrate this huge milestone, and move together toward a bright future. 

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The content on this site is not intended to provide legal, financial or M&A advice. It is for information purposes only, and any links provided are for your convenience. Please seek the services of an M&A professional before any M&A transaction. It is not Acquire’s intention to solicit or interfere with any established relationship you may have with any M&A professional.