Team Building: Communicating to Your Staff About Mergers & Acquisitions - The Edge from the National Association of Landscape Professionals

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Team Building: Communicating to Your Staff About Mergers & Acquisitions

Mergers and acquisitions are quite common in the lawn and landscape industry, whether it be private equity firms or other businesses wishing to expand their current offerings.

While it can be an effective growth strategy to bring in new talent and strengthen your existing market position, communicating this change properly with your team before and after an acquisition is crucial. Change is hard and if you say too much before the ink has dried, you can spook a deal but failing to message what is going on after a merger can be just as detrimental.

Before Closing the Deal

It can be tempting to inform your team of an impending deal, especially if you’re an open-book company. However, this practice is highly discouraged.

J.T. Price, CEO of Landscape Workshop, based in Birmingham, Alabama, says the employees of the company being acquired often find the prospect of an acquisition stressful. No one at the target company aside from the owner and maybe their key accounting person should be aware of the acquisition prior to closing.

“Within Landscape Workshop, we have a very small group that is aware of acquisitions pre-closing to protect the seller’s confidentiality, and no LW employee in the city or cities the acquired company operates in learns about an acquisition in that city prior to closing,” Price says.

Fred Haskett, founder of TrueWinds Consulting, says it’s best to keep the potential merger under wraps unless there are other stakeholders.

“When word gets out, that kills more deals than anything else,” Haskett says. “I’ve seen non-disclosure agreements being put in place for the folks that have to be informed of the process or are part of the process. Otherwise, it shouldn’t be announced until the deal is sealed. That makes panic move through the ranks.”

Chris Senske, acquisitions ambassador for Senske Services, based in Kennewick, Washington, says the necessary due diligence required will often require you to bring a few key employees, like your CFO or COO, into your circle of trust.

“Due diligence can be very time-consuming and there will be a lot of unusual information requests, so it will be necessary to understand how to ask for information from your team – especially the accounting team – about financial information that is requested without tipping your hand,” Senske says. “I don’t profess lying to them, but make sure that you have a plausible reason for the request.

In some cases, smaller companies may not need to involve anyone beyond the owner. Price says that the fewer people who know about a deal, the better.

“The goal is not to cause any disruption and rumors that will cause people to look for a different opportunity because the employees are the most important part of the acquisition,” Senske says.

After Closing the Deal

Haskett says the right way to go about communicating a merger or acquisition is to do it immediately and face-to-face, starting with your key direct reports and then moving through your org chart. He acknowledges that if you have four or five branches, this can be harder, but he still recommends telling your key leaders face-to-face.

“They’re human beings, you’re a human being, do it face-to-face,” Haskett says. “The more you stretch it out, the more someone hears about it from the wrong person and the wrong way. There’s no way that this isn’t awkward. I don’t care who you are; there’s no way this is not uncomfortable and awkward.”

Price says they carefully plan with the seller and recommend having a private meeting or meetings with their key managers and immediately making a general announcement to the rest of the employees.

“We have senior LW team members on hand to help answer questions and to show that we are committed to making sure the seller’s employees are smoothly integrated into our team,” Price says. “It is critical to get clarity and certainty to employees of the acquired company immediately. As soon as we’ve communicated to employees, we start communicating with customers.”

Senske agrees that rolling out the information so everyone hears simultaneously prevents the rumor mill from getting started and erroneous information from spreading.

“That is why you want to keep it close to the vest until the deal is done because it could blow up before getting across the finish line and then you have a mess on your hands,” Senske says.

Haskett asks owners to consider how they would want to be informed. He suggests crafting a story to tell that informs your team of your acquisition journey and answers their likely questions, such as “Why’d you do it?” and “Are you planning to stay?”

Senske suggests that a multi-branch, larger organization, have a video created in advance that branch managers can share with their team. This information can also be covered in a Zoom or Teams meeting.

“The owner of the organization, maybe in cooperation with the COO, could touch on all the salient points of what is happening and why,” Senske says. “It is always best to be transparent in these conversations and be ready with FAQs to answer any questions.

Keys to A Successful Transition  

Haskett encourages owners to practice their message and common responses to expected questions before announcing an acquisition to the team. Remember to share the positives that this change will bring to the team. Price says, in general, they offer better benefits and there are more opportunities for advancement.

Haskett advises the new owners to introduce themselves to the organization and assure the staff that nothing will change a great deal.

“From the perspective of the acquirer, once the announcement is made, go right into a presentation of exactly what the plans are for the now and future,” Senske says. “The communications need to be transparent about exactly how individuals will be impacted. If it is true, tell them their benefits won’t change, their pay will remain the same, vacations will not be affected and that you love them and want them on board.”

Jim Houston, vice president general manager, Eastern Operations, U.S. Residential/Commercial Services and Commercial Landscape Services for The Davey Tree Expert Company, based in Kent, Ohio, says once a deal is closed, they head to the company with a team to share information about employee benefits, skills training, safety and Davey’s culture.

“You want to maintain the stability of the team while you’re going through the integration and the more hands-on the new owners are, the better,” Haskett says. “There should be that day a very clear timeline presented for the integration process.”

This transparency helps employees understand what to expect and when certain changes will occur. Houston says they have honest conversations about what the next few days, weeks and months will look like.

“We strive to be empathetic toward what they’re feeling and transparent about what’s to come – and allow time for them to adjust and settle in,” Houston says. “Change can be difficult but change also allows for growth, and overall we find that people adapt pretty quickly. When they’ve adjusted to the initial news and are ready to hear more, we talk about the short- and long-term opportunities at Davey – in terms of training, career growth and employee ownership.”

Whether the former owner should stay on for the transition depends on the seller’s desires and the company culture.

“If the culture was a good culture or a great culture and it was really significantly driven and directed by the owner, and the buyer should keep them on as a consultant,” Haskett says. “Make sure that they’re there to hold everybody’s hand through the process.”

To ensure successful integration and avoid ‘us versus them’ mindsets, Price says after closing, it is all about ‘we.’

“It is all about communication and being forthcoming with information, including treating new members of the team like everyone else,” Senske says. “Some of those individuals will have much more and diverse experience that will benefit the company as it grows.”

Jill Odom

Jill Odom is the content manager for NALP.