From The Due Diligence Show (Episode 9), There are so many things to consider when communicating a deal to the world and those directly impacted. Thought Source use their experience to talk in detail about how to approach communicating different types of deals and what to consider when it comes to communicating how a deal affects those being acquired and those acquiring. It’s more complicated than you would first think!

Adam Jaques: This is a topic which is close to my heart. It’s all about communicating deals and the sorts of things that we need to do both internally and externally to promote the fact that a deal is happening. Now, there are some legal aspects to this as well as some product and market aspects. All sorts of things that need to be considered not to mention people, too.

Luke Silcock: Some of those initial communications are subject to subject to close or, subject to some other conditions. How do you cut through that and get a good message out?

Adam Jaques: There are some particular words that you have to use, or you should use. Depending on the deal size, there’s a few different phases you go through in announcing. Normally, there’s an announcement that’s made about an LOI signed or a letter of intent, which means that were pretty certain that a deal is going to go ahead. That’s essentially what it means. But you talk about the future acquisition, you talk about closing the acquisition at a future time. It’s always the fact that the acquisition hasn’t happened yet. And people tend to get that mixed up because they think “oh, this this deal has been announced. It’s done.” It’s actually not done. And things can go wrong between that point and close to stop a deal from happening. There’s a lot of government regulations, board approvals, shareholder approvals, anti-competitive things that companies need to go through to make sure that everything is okay. And sometimes they can go bad so, really, it’s a pre announcement before a close is made. Closing can be anything from two days, two months or a year depending on the load the size of the company. The language is important and sometimes with the smaller deals, it will be a close in announcing close on the same day.

Luke Silcock: At this point we’re wanting to talk it up a bit. What can you do in that space?

Adam Jaques: Every acquisition is seen as a positive for the acquirer. It’s about expanding, it’s about building, it’s about a commitment to your company. You’re investing in your company by spinning typically X amount of billion or hundreds of millions or millions of dollars. It’s tucked up in that regard. It’s usually positioned in a way that you are bringing on additional revenue as well. More customers, more revenue, great talent, wider teams, teams that touch different regions, that perhaps you your company hasn’t made it into before.

There’s also quotes. You’ve got to quote the executives as well the CEO and board members. Typically, it is a celebration and is a very positively talked about thing. It’s news, but it’s not negative news by any respect, particularly from press releases that are done. What we’re talking about here is press releases, particularly in the in the LOI phase where you will use signing up to say we’re likely to do a deal. Is there a particular sequence that you have to follow when you’re going through all of these announcements? There’s some specific order, more so with companies that are publicly listed, where you’re very cautious about share price and markets and that sort of thing. These may vary, depending on where you are, but you’ve got to give the right notice as there are blackout periods.

There’s all sorts of complications there when it comes to acquiring organizations, and there’s two types of acquisitions. Typically, there’s either a share-based acquisition or an asset-based acquisition. The share based acquisition is when you’re bringing on the company and entities. The assets are another thing. You’ll see in press releases, XYZ has acquired the share or the assets of whatever the company is, and usually that’s buying a technology. And there’s a bit there’s a benefit to that actually and buying customers to you get to remove all the complexity of their business.

Luke Silcock: I think that’s fascinating to recap on the story of getting the formal comms, right, getting the announcements that go to the market and, and so forth. One of the things around comms that fascinates me is getting it right down a couple of levels, and maybe when it impacts the customers. In particular, if it gets the teams really excited about the Better Together story, so that’s where the two companies come together and they delivering the goodies for the customer.

Adam Jaques: I think that is that is down the path. It’s something that is more in the integration phase versus the deal making phase. One thing that is very delicate is dealing with the internal announcements and how it all fits with the company that’s being taken over but also the company that’s acquiring. There are staff members will be asking me what about my job? What does this mean for me? Typically, that’s what a lot of the questions are all about internally and people are thinking that way. But sales folks are wanting to know, how can it be sold? What does this mean for my number? How am I going to meet my quota, all those sorts of things. Typically what will happen is you’ll create an internal email, it’s a bit like a press release. It’s usually an email from the CEO. And, frankly, it’s something that is chewed on a lot by quite a few people as to how this gets positioned. The advice I’d give is – don’t overthink it. Don’t polish the hell out of it. Because people see through it, employees are real people and companies want to know about the raw news. They don’t want the politician’s answer as to what’s actually going on. So be real.

The lead, the messenger, the CEO can talk about structure, can talk about products, can talk about opportunity, can talk about teams, but there needs to be some realism throughout all of that. Okay, if it’s not a completely positive story in terms of, you know, resizing, changing teams around reporting lines, whatever, talk a little bit about that. Don’t be scared to be real with the employees. You will get a lot further than giving the politician’s answer.

Typically, what we’ll do is split it off into two or three parts. There’ll be an internal employee’s communication that goes out, a channel partner, under confidentiality agreement, communication will go out as well. That goes out to partners of an organization, which is more trusted, but I guess, not as trusted as internal. More information is given to them. And then there’ll be an FAQ created. That’s where the real detail is and that helps employees field questions from other partners, from the media, from the public. Typically, someone will be put on as point to deal with media.

In large companies, I’ve had situations where I’ve been briefing five to 10 people as to how to deal with the media side of it. You’ve got to be able to give them the right answers and give them the right positioning so they say the right thing. That’s communicating the deal. Communicating the excitement of the deal, both internally and externally. There’s a lot to do when it comes to doing an M&A project. Technology DD is a big thing and it does encompass a lot of different areas.



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