Mergers and Acquisitions For Dummies (91 page)

Upon closing a transaction, you probably have some ideas, if not a plan, for making changes to the acquired company. But before you actually make those changes, you need to make sure the newly acquired employees are up to speed on the plan. You don't need to (nor should you) dump everything on the employees at once; rather, I recommend rolling out the changes in multiple parts as I outline in the following sections.

The timing of the transition process I suggest here is rather general. Each situation is different, so keep your particular integration in mind as you time out the transition process.

Immediately

You should settle the following tasks and process prior to closing. The moment the deal closes, you need to communicate the following information to the new employees:

Company name, e-mail, phone, and Web site:
Do the employees continue to use the old company name, use the name of the acquirer, or use something else? Will they be using the same contact info, or do they have new e-mail addresses and phone numbers? Will they have a new Web site and/or URL? Do they need to use a particular letterhead and/or e-mail signature? Even if the info stays the same, make sure to communicate the fact to the employees that their contact info is the same.

Payroll:
Make sure the new employees continue to receive their paychecks (or direct deposits). Pay close attention to dates of the all-important day known as payday! People work to earn money, so this area is one you don't want to screw up. If a payday is coming immediately after closing, make sure that payroll is set up ahead of time so you don't miss a beat when paying employees. If you are unable to continue direct deposits for that first payroll due to changing banks (not an uncommon occurrence following a acquisition), you absolutely need to make sure checks are printed and ready to be delivered to the employees.

Contact info of the new owner:
New employees need to know who to contact if they have a question. Following the announcement of the closed deal, make sure all the employees know who to contact at the new owner's company in case they have a question.

Banking and paying bills:
If you're switching the acquired company to a new bank, that bank account needs to be set up prior to close so the financial people at the acquired company know exactly where to deposit checks and from where to pay the bills.

Purchasing:
The new employees also need to know whether their suppliers are changing or whether they should continue to purchase raw materials from their old sources.

Sales team:
In addition to needing to know the basic contact info, sales teams need to know which proposal templates and sales contracts they need to use. Should they continue to use the old documents, or do you have new sales documents?

Within 30 days of the close

You don't need to inundate employees on the day the deal is announced with every single change on the horizon; let them digest the announcement before you begin to make the following changes:

Operational update:
You may want to change purchasing guidelines, vendors, suppliers, and the like, and instituting those changes within the first month makes the most sense.

Human resources:
New employee handbooks, new-hire paperwork, 401k documents, insurance documents, and so on should be filled out and completed within the first month, if not the first days, following the close.

Hiring and firing:
Probably the most difficult of all post-acquisition integration is reducing staff. If cuts in staff are necessary, make those cuts as soon as possible after the deal is announced. It's a painful process, but the sooner it's over, the sooner the business can move forward. You don't want employees wondering (and gossiping) if they're going to be fired or not.

Within 90 days of the close

You can make some changes, such as the following, even later after the close:

Closing or moving operations:
If you've made some decisions about combining or moving offices or shuttering operations, instituting those changes during the first few months of the acquisition probably makes the most sense. You don't need to do this on the first day (remember, you want to give employees a little bit of time to digest the deal), but getting these sometimes difficult decisions over with sooner as opposed to later makes the most sense.