As indicated in my last few Blogs, I am continuing the discussion of issues that an acquiring company needs to address to get a better understanding of the potential acquisition target—before a deal is finalized. I pulled much of this content from an article written for The International Reprographic Association (IRga) newsletter, where I discussed a few of the issues and presented my thoughts.
A key question to ask the potential target’s owner is: “What about your plans after the sale”? In some cases the owners are entrepreneurs who are well known to their customers and want to keep working, in which case they’re valuable to the acquiring company.
If the owner is valuable and wants to continue on with the company, the acquiring company should develop an attractive employment offer. The new owners should also understand that the former owner will probably have some adjustment issues. Working for someone else after having created a successful company can be difficult.
There has to be some sensitivity on both sides. The person whose company is being acquired has to realize it’s no longer his or her company. On the other side, most acquiring companies recognize that it’s valuable to have the former owner on the team, so they are less prone to micro-manage that person as they know they’ll probably lose him or her if they do so.
Whether the former owner stays around or not, the acquiring company needs to develop a non-compete with the former owner.
More questions or issues will be addressed in the upcoming months. If you want to chat, give me a call at 201-523-6326 or Email me at tcobery@epicomm.org.