“Good morning, everyone. Thanks for coming to our emergency meeting today. I have some big news. I was recently presented a significant offer for the company and after much consideration, I have decided to accept it. As of two hours ago, I am no longer the owner. There will be a lot of change coming, but for now, everything stays the same. You will hardly notice a difference!”
For many of you, this short speech might generate an unnerving flashback. While the future of restoration is facing daunting opponents like staffing shortages and rising costs that continue to throw haymakers, a new challenger has entered the arena. Restoration has emerged as ground zero for mergers and acquisitions (M&A). Industry trade shows have been transformed into meat markets as money is cheap and many owners are either burnt out or looking to join something viewed as exceedingly prominent. A plethora of content has been generated for restoration business owners who are attempting to buy or sell.
It’s time to bring much-needed attention to those who have bolstered their company, making it a worthy entity for purchase—the employees. Unfortunately, they are traditionally oblivious that the company they work for is being sold, don’t know the new owners, and feel they have little control over what happens next.
From entry level to senior manager, every employee in an acquired company is justified in feeling concerned or even scared after learning of a buyout. They dedicated years to growing the vision of the owner, developed genuine friendships, became emotionally invested in the company’s success, and in the blink of an eye, everything appears to have been obliterated. The restoration industry itself is already immune to consistency, so this new disruption is amplified, bringing additional pressure and stress on top of feeling hurt.
Nathan Pitney, General Manager of TCM Restoration in Palmer, Alaska – which was recently purchased by another company – remembers being approached by the company founder about the sale. “My thoughts started racing” he said. “I asked a few questions and congratulated him. I really didn’t know what to expect.”
As an employee, once you digest the news and begin to accept your new reality, it’s understandable that you may be focusing on what you can’t control, like changes to your role, new bosses and procedures, and the future of your employment status. You’ve probably felt like you have three main avenues from which to proceed:
- Put your head down and try not to get noticed.
- Brush up your resume and go job hunting.
- Embrace the change as a chance to grow.
While the first two are markedly easier, the third is the most productive. The notion that purchasing companies want to clean house after an acquisition is finalized isn’t true for the restoration industry. Tim Hull, General Manager of Violand Management Associates, has coached many companies through M&A and notes, “All companies are searching for talent. If you are a hard worker with solid ethics and performance, you have little to worry about. They want consistency from the employees of companies they purchase, not blood in the streets.”
When another firm buys the company you work for, they have already done their due diligence. They know you are a producer. The results of your production may be a contributing reason as to why they acquired the company. They desire the performance that drove up the EBITA to continue to stay high. This doesn’t happen by firing the team that created it. Pitney agrees, adding, “One of the biggest challenges was preparing for the future while knowing the future was uncertain. This is why we focused on the basics. Maintaining business as usual for our production staff was our main focus. Doubling down on the things that made our company successful was the right direction.”
The reality is that the acquiring company is looking for employees who embrace change and reward those who want to be included in the process. Sonya Scheetz is a highly valued employee at Alpha-Omega Disaster Restoration in Billings, Mont., a partner company of FLEET Response after recently being acquired. Per her experience, she says, “I could describe it as a roller coaster ride. Change can be difficult for some people, especially working for a company you have grown to love. There is a bit of negative connotation around the word “purchase.” My initial thoughts involved corporate managers coming in to clean house and implement a ton of changes right away. Some people may have wanted to jump on indeed.com and start looking for a new job immediately. But change can be positive, and it’s important to have an open mind. There are many leadership opportunities that can present themselves.”
Attitude during change is pivotal, and you being an advocate for change puts you at an advantage. Although the past may now be “the good old days” in your mind, it’s recommended that you leave the past behind. If you feel yourself thinking, “that’s not the way we have always done it,” step back and reexamine those thoughts. The inability to change results in failure. If you are uncomfortable with the amount or speed of change, it’s up to you to speak up and ask for help and clarification. Let the new owners know that you want to be part of the solution, but you have some questions. The leaders of the company that acquired yours should be looking for feedback and understanding. If they are not, then you have justification for option #2, job hunting.
Kelley Dolan, Chief of Staff to the CAO of First Onsite Property Restoration in New York, formerly Maxons Restorations, offers additional advice for employees entering an acquisition. “Get organized! The firm acquiring you has additional tools and resources meant to help you. Save these tools in a way to easily reference them. And get ready for meetings, more than you can imagine! In small companies, decisions happen quickly. Larger companies mean more stakeholders but also more people for support. Don’t fall into believing that nothing is going to change. A lot is and it will take time. An acquisition has a lot of smart people involved to make it happen and some of the changes will be amazing.”
What happens if you are a high-level manager, but not an equity owner, and you have been tasked with being part of the due diligence process? This means you have signed a non-disclosure agreement, saying you will not inform other employees about what’s going on. There comes a point, once the deal is final, when you will also be part of the group that lets the cat out of the bag to the rest of the team. Rob McNamara, a high-level manager at Insurance Restoration Specialists in Monroe Township, NJ, now First Onsite, went through this when his company was purchased. “I knew for months that we were negotiating a sale and I was part of providing research during the due diligence. When I was finally able to let my team know, some of them looked at me with real hurt in their eyes. People I have known and worked with a long time. There was anger and a lot of questions. It’s more than changing the sign on the building. There is a human factor.”
He advises any owners and senior managers going through an M&A to acquire as much information on the purchasing company as possible. “Employees had questions for me that I wanted to answer, but I couldn’t because I didn’t know.” When asked his thoughts on the entire process, McNamara stated, “It’s a very emotional experience. It was hard on everyone. But within a couple days of the acquisition announcement, we were hit by a large storm and immediately there were trucks and people in our office ready to help who wouldn’t have been there otherwise. There were a lot of benefits and resources to make us better once we got to the other side.”
When it all comes down to it and the sale is final, the owners of the company you worked for prior will have gotten what they wanted, a sizeable check. The decision makers of the new firm will have gotten what they wanted, a reputable company in a service area they were looking to fill. It’s now time to figure out what you want. Its OK to ask, “what’s in it for me?”
Some self-preservation is a good thing. Review your job description. Are there important responsibilities you handle that are not written in it? Get them included and increase your value. Does the new ownership firm offer roles, training, or opportunities that previously were not available? Can you create a better you by being a change management leader? If so, here are some do’s and don’ts to follow during and after the transition:
- Overcommunicate if you are an employee. Double that if you are a manager.
- Get to know the new people you work with and encourage group activities.
- Be there for your teammates. Make sure they are handling everything as well as they can.
- Identify areas where systems and procedures are not meshing and offer solutions.
- If you are in a high-level position where there may be duplication in your role, reach out to the new firm to see what opportunities exist at the corporate level.
- Follow the notion of “us vs. them.” Collaboration is vital. You are one team moving forward.
- Consistently complain or vent inside the organization or to fellow employees. That’s what spouses and friends are for.
- Make unnecessary or unreasonable demands on the new owners to gain leverage. They want team players who are aligned with their vision for the future.
- Forget that culture is what made your company successful to begin with. Yes, the culture may change, but it doesn’t have to get worse. Become a culture warrior.
The M&A process, whether you wanted it or not, is what you make of it. If you hold tight to a notion of being wronged, things aren’t going to work out well for you. But if you allow new doors to open, you may create for yourself a career you will excel in, along with a better paycheck. Sheetz urges everyone to know, “There is so much that we can learn from each other in this industry, including best practices. The sense of having a greater team to rely on has been fantastic for me personally.” Dolan adds, “Together people in our industry move mountains … an acquisition can lead to amazing moments. But there are also going to be days where people feel lost. That’s OK. Grab your team and lead them back to the light.”
A final note goes to the owners getting ready to sell. I have spoken to many who have gone through being acquired. All of them were highly successful and incredibly talented. All of them also had one thing they wish they would have understood better—the effect the sale would have on their staff. Much of your success is due to your abilities as an entrepreneur, but an equal amount was built by your team when they lined up behind you and helped you create your dream. You have earned the option to sell and congratulations. Just realize that your team has earned the right to how they feel about the change as it happens. Make it a priority to ensure they are set up for continual success with or without you.