The recent sale of IEQ Industries to Gallagher Fluid Seals provides an excellent case study for how employees can succeed and thrive under new ownership. This is often a major concern preventing business owners from committing to the sale of their business. However, employees are still often primed for growth and success despite a change in ownership. Rich Garnaat, President and Sales Manager of IEQ, remains confident in his role post-acquisition.

“There is comfort in the fact that my role is the same,” said Garnaat. “My goal has always been to serve the owner and company in the best possible way, and I figured that mindset would come back to benefit me as well.” While not all roles will remain the same post-acquisition, encouraging key managers to display a “company first” mentality as much as possible will help the rest of the employees follow suit and adapt to changes.

Garnaat identified transparent owner communication as a key component in alleviating employee stress, “IEQ’s owner kept me informed and involved in the steps of selling the business. Talking about the potential sale of the business was not a surprise or scary, it was a welcomed opportunity for me to help the owner get the business ready to sell. However, we had such a close personal relationship on top of the business relationship, we had a lot of trust in each other. That much early and open communication about selling may not make sense for another owner if the trust isn’t as strong.”

As an owner, be sure that you are confiding in only key managers you have a strong and trusted relationship with, as early news of a potential transition before negotiations and due diligence are finalization could send some employees running out of fear of a non-secured future. Additionally, many transactions don’t end up closing so there’s a good chance the transition may not happen. Telling key managers too far ahead or telling key managers that aren’t fully committed to the future of the company could backfire.

After negotiations and diligence have been finalized, mapping out in detail for the selling company’s management team what things will change and what things will not change can ease any transition fears. It’s important for the buyer to paint and communicate the post-transition picture to the entire team when the timing makes sense. Garnaat recommends, “Having a lot of clear and open communication with all staff at the company. When things are finalized and you know this is going to be the buyer, it’s ideal to bring in the buyer and have an employee meeting or several meetings to map out what the process is going to look like after the sale.”

Lastly, asking the buyer for a specific post-acquisition employee transition plan along with any changes to the organizational chart will help pinpoint key transition conversations that will need to take place. As the business owner, you may not agree with the changes the buyer is planning on making but helping prepare key managers on your team for those transitions will be crucial. Garnaat says that the team at IEQ is very satisfied post-transition. “Gallagher has been true to everything that was promised before the business sale closed. Things have gone very smoothly and I’m incredibly pleased with the new ownership.”

With the proper planning and timely and transparent communication, you can sell your business knowing your employees will be left in good hands!

 

The NuVescor Group exists to build trustworthy relationships between manufacturing buyers and sellers throughout the entire acquisition process. If you have questions about selling your business, please contact us today!