M&A: Be forthright and professional

Q. Some of my employees heard a rumor that we may sell our company. How do I deal with these rumors and what and when should I tell them?
 - 
Tuesday, May 29, 2018

A. The era of competitive bidding has caused 40% of HME businesses to close or merge over the past decade. Sometimes a sale or merger is the only option for a business owner to scale for survival and realize a return on a lifetime of work.

While the thought to just deny may come to mind, a business owner will find many benefits to being forthright, professional and candid in directly answering an employee’s inquiry.

One sincere answer is: “We are always looking at our strategic options to manage and insure the health and well-being of our company, just as we look out for and manage the services we provide to our patients.

With the rigors of reimbursement and regulatory pressures, we as business owners, have a responsibility to all employees to keep ahead of the curve. We must always keep an open mind and explore options to grow the business. If and when we do decide to actually make a strategic move, I promise to keep you informed. Until that time, please don’t let idle rumors impact the success we are having together.”

While there may be some instances of the old “merge and purge,” for the most part, business buyers and owners recognize that the strength of the business, in many ways, lies in the strength of its employees. A buyer or partner will certainly evaluate the roles and performance of all employees and there are no guarantees. In many instances, those employees who serve critical sales and operational roles are often retained by the acquiring business or integrated into the merged company.

 

 Jonathan Sadock is managing partner at Paragon Ventures. Reach him at jsadock@paragonventures.com.