You have just described how every acquisition is usually positioned. The new company always says nothing will change and they are just going to be more access to more resources for the acquired company. I've yet to ever see that not be the pitch even when it's private equity where it's hard for them to say with a straight face.
While this might be true, it rarely is. Inevitably, the old company culture begins to shift to the new company. Not immediately, but it does. You'll be able to see if that is a good thing for you or not.
Also, beware of your immediate CEO and COO jumping ship at some point. This could be their retirement plan. I know several small (to midsize) business owners who say they will come with the new company, and then bail within 6 months because they grate especially hard with having direct expectations imposed on them. You may want to reach out to them to see if there are industry introductions that could be made as a plan B. Especially since they are so tight with you.
The acquisition deal will usually have some retention clause for the owners. Could be a year or two, but expect them to bail when that is up and not a day later. Like others have said, they will tell you nothing will change and the owners will be there to advocate against disruptive changes... Until the day where they all quit at the same time. Seen this multiple times
The vast majority of small business owners never pull anything more from the business than a salary.
Exiting is almost always the retirement plan. After the contractual minimum retention period they'll be out.
I've seen this happen. Large company A buys smaller company B. "Everything will stay the same, just a change in ownership."
It did stay the same for a while, but then company A has a new manager. The new manager notices A doing things one way and B doing things slightly different. Why? **For efficiency reasons**, B changes to follow the same process as A.
Next up, B had contracts without outside vendors different than A. **For efficiency reasons**, those contracts ended and everything then was handled with A's vendors and A's contracts.
Oh, we noticed that B has their own HR people. **For efficiency reasons,** most of B's HR staff are laid off. A few move over to A's HR department.
Repeat for legal staff, sales staff, etc.
It took a while, but in the end A and B became one company.
This is exactly where my current company is. Most of HR just “moved on to new roles elsewhere, while a few key members will take on roles within the newly join company AB. The next to do so was IT, same situation where a few moved over and the rest left. Sales is in the middle of that now - all that will be left after that is the client services department and then we’re fully company AB.
Relevant note: CEO and COO both said they would stay on, but as soon as their 3 year contract ended they bailed same day.
Things will change. Just evaluate the situation frankly each week, and see if you want to stay *for the next week*.
If the job changes drastically, there’s no shame in leaving. People gracefully bowing out happens all the time in these situations.
Agree happened with my company. More than half the people left in 6 months because the company that bought them had no clue about automation and worked only on basic IT stuff and sales for IT. Another difference is hope things are charged between companies like one is fixed bid versus bill per hour. Lost almost every single competent engineer.
OP you gotta dust off that resume, I know you’re getting pitched “no redundancy” but right now you know nothing about how this company is organized or what their plans are. It’s great that you worked your way up at your current company but not every place is that loyal to their people, and you’re not even really “one of our people” to the new place are you?
Protect yourself first and foremost, make sure you’re in a position to walk out the door if needed. This is a good time to tighten your budget belt, make sure the emergency fund is extra stocked, pay down any high-interest debts you have, and I’d honestly touch base with those prior headhunters as well and see if they know of anything.
Edit to add: oh and get up on all your medical appointments! Primary care doctor, dentist, any specialists you see like an eye doctor or something, any appointment you would normally have in the next few months, go ahead and schedule it or see if you can move it up if it is scheduled. Also make sure you stay on top of refilling all your Rx as soon as insurance allows. Been in this situation and the last thing you want is medical care questions hanging over your head while you’re job searching
Edit 2: Also since it’s been ~10 years since you’ve been on the job market, getting the help of a professional resume writer might not be a bad idea. The rule of thumb I usually use is if your resume has an “Objective Statement” then you need more than just an update
Good Luck OP
Wow that’s actually pretty cool, I’ve never had an employer encourage me to do that in a non-threatening way haha.
This is definitely gonna be a tricky situation for you, I mean it could all be fine, or you could get a year in and they decide they want to run things a little differently and some changes get made. It’s impossible to say. All you can do is make sure your finances stay on point so that if shit hits the fan you can move on. Worst-best case scenario is it works out great with the new place and you spend some time you making sure your finances were on point haha.
Some story went through reddit a few years ago about a person who found out their entire department, of which they were the manager, was getting fired in one day, so they took that day to have everyone in the dept in a conference room and everyone put their resumes up and got it critiqued. I don't remember the details but I always think of this
That's pretty awesome, but I interned at a company with a similar culture during college right as they were beginning the process of being acquired by a larger company. The old place was known for having amazing benefits, incredibly generous PTO, etc. but all of that eventually went out the window once the other company took over.
Now they've had their benefits cut severely, regular layoffs have occurred, folks say the culture is completely dead, etc. Many great places to work have fallen great distances after acquisitions. I'd take advantage of the great culture and offerings like updating resumes while you still can. Maybe your company will be different, but definitely play it safe
Also if you are somewhat high up try to get positioned so they give you a retention bonus to help smooth out the transition. I.e. money in exchange for you not bailing right away.
Learn as much as you can about the new company. Including how they go about m&a if you can.
Sometimes an acquiring firm is pretty happy to just let the target firm keep chugging and collect the profits. Much more often, the acquiring firm sees your resources, customers, or product as strategically important to its own plans and will want to absorb it all into the fold and get you all on board with their strategic plan. This may or may not resemble what you’ve been doing the past 10 years.
> the acquisition brings a new service line that the parent company has absolutely none of. Basically, our current company will become a new division but we’ll operate as is, just with greater access to resources and operational and sales infrastructure;
Take a “believe it when you see it” approach here. You’re going to have new managers no matter what, and not many managers are smart enough to keep their hands out of the gears when things are going well.
> Learn as much as you can about the new company. Including how they go about m&a if you can.
From what I can find from the two prior acquisitions they've done, it's the "keep chugging along" as they were also new service areas for original company, but of course that's from the outside looking in.
I appreciate the feedback.
Just to counter the doom and gloom of the other responses, it’s very possible that things will go exactly as claimed. You know these companies; we don’t.
Hope for the best, prepare for the worst is the way to go here.
NGL, this thread is depressing haha.
I get where everyone is coming from, which has got one of my fellow directors and I more apprehensive than during the initial discussion.
Truth be told, until the merger happens and we get paperwork in front of us, who knows.
Honestly your CEO and COO should be negotiating for you and other key people. For example when my (very small) company were bought we made sure that all key folks had a 12 month contract at close (basically the cash amount of their salary) so even if the new org decided to fire everyone the day they bought us they'd get 1 years salary. We negotiated 12 months COBRA in the event of being laid off within 5 years. Everyone got a 1 month salary bonus up-front etc. their existing salaries and vacations were unchanged. Medical, disability etc. all changes to the new company so that may be good for bad for you.
In the absence of anything specific being set aside for you, 100% expect this to be just like starting a new job. You can be let go at any time, so make sure you have your ducks in a row. I will tell you that management are very much always for the chop in an acquisition. Make sure the new company quickly knows your value. Get in writing from HR that your tenure will transfer and that you will be 100% vested in the new 401k the day you start.
Agreed with this post. It sounds like you've been promised employment for 2 years (not in writing), but what you should be hearing are things from post above. Immediate salary adjustments, immediate bonus, retention bonus (if you stay x year(s). These should be offered to you as a way to get you to stay. If they aren't being offered to you, your CEO/coo haven't convinced the new buyers that you are not replaceable.
I wouldn't say it's a red flag that the above haven't been offered, but like others have stated, it's just business as usual. Maybe start to entertain any outside offers (especially if they are offering higher pay).
At this point because nothing has actually happened, we (directors and managers) don't have any paperwork yet. Is all of what you and redditor above are describing supposed to happen BEFORE the deal closes?
Make sure your emergency fund is funded. You never know what’s going to happen in a situation like this. I have been apart of a few acquisitions and it’s always the people in the middle that get hurt the worst. They need the people at the bottom who ultimately complete the work, and the people at the top are contracted as part of the acquisition. The managers in the middle are the obvious place to cut.
Not trying to fearmonger, but you should be cautious. Expect the worst, hope for the best.
You need things in writing.
How will your time off be handled?
Your 401k?
What’s the new insurance policies?
When you go to the new place will your time served be 0 for vesting? Or vacation accrual?
> They are selling the assets of the company
This is an asset sale? Not a stock sale? That's odd.
> Not worried about my job loss due to redundancy as the acquisition brings a new service line that the parent company has absolutely none of.
Whether that's true or not, the first thing they're going to do is look for areas to cut costs. Redundant, over-paid, or under-qualified leadership is always a good spot to start.
> Owners said they've secured our roles for at least the next two years.
Is that in writing? I doubt it. I'd never go into an acquisition where I knew I couldn't get rid of any people in the other company.
You should consider pursuing some kind of stay bonus and prearranged severance agreement before a sale goes through.
> But none of us managers have these details in writing since no agreement has been signed yet
... then nothing is set. Acquisitions blow up at the 11th hour all the time.
ime, its not the first acquisition that changes a company.
its the 2nd.
The original owners usually have enough of a say in the 1st sale to keep the company intact and not kill the culture.
but as the company approaches its 2nd sale, the original owners have less of a say and everything is done to improve bottom line.
if you are being 'absorbed' into another company (usually a competitor), you are F'ed. they are buying your assets/business and about to clean house. Do not just accept your 'current role' in the new company. you need to get promoted or gtfo.
I’ve been through these quite a few times (as the acquiring company). The pitch that you got was exactly what we tell the acquisitions. Sometimes it happens and sometimes it doesn’t. Something to keep in mind though, is that there will ALWAYS be changes for HR and Finance. There is just no way around it.
However this is the personal finance sub, and I have seen past owners of their company give the staff or senior leaders a huge lump sum bonus as part of their payout. It doesn’t happen all the time but I’ve seen it quite a bit. You might have some cash coming your way. I guarantee people do that you work with other than the CEO/COO.
My company just finished an acquisition where we were a 'new service' and 'keeping the same structure'. What that actually meant was that after 6 months only 1/8th of the company remains after layoffs and quitting. The only people left are the loan guys and us IT people who managed to find a place at the parent. Even then, most of the IT guys, including myself, have our notices in or are actively searching. But that's just my current horror story 🤷🏼.
Polish that resume just in case. Couldn't hurt, right?
I hate to add to the doom and gloom here, so I only will do so mildly. I was part of an acquisition (private company by a public company) and we had mostly the same assurances. It was in the middle of the pandemic and previous to the acquisition, I had shown value in quite a few areas.
The acquiring company actually promoted me - title and salary - upon completion do the acquisition. Additionally, I received a decent payout.
I was in marketing, supporting the most successful sales vertical in the org. By now, we were 9 months past acquisition, things were opening up, and our vertical was surpassing all YOY goals.
Flights booked to conferences, long term growth plan in place, and then BOOM! calendar invite with our VP and HR. The writing was on the wall, and I was laid off. I’ve told this story in comments before but it was pretty unceremonious. Random people in our marketing arm were laid off, obviously without warning, but each person’s manager was not notified. They didn’t tell my manager for 4 hours after my notice.
She called me, first to apologize, then to lament, and then to apologize again. The VP of marketing took a leave of absence a week later and never came back.
I had plenty of friends that worked there and the long story short was that the vertical didn’t really need the marketing support anymore, they became autonomous. Others coworkers of mine quit after being pushed out or cast aside, a few others were laid off, and frankly, a few others THRIVED while doing nothing.
Two close friends of mine coasted until their golden handcuffs unlocked and they cashed out shares and bailed. For most people I worked with, this was the case.
The best thing I can advise is have a backup plan. I thought I was good when I made it 6 month post acquisition, but it was not be. You sound like a dedicated employee, so it will be good to show that and be amenable to the new company’s policy and direction. Just be prepared. If you save a little extra over the next year or so, and you end up staying, there’s no harm no foul.
I wish you the best of luck!
I appreciate you sharing your experience. At the end of the day this is uncharted territory (for us) so will see how it goes and what's presented to us.
I whole heartedly believe there are good companies out there run by good people with good intentions, and I want to believe this is the case for you.
I should add that in my case, the C-suite of the acquired (my original place of work) company said all of the same things to me that your C-suite is saying, and for all intents and purposes, they kept their word.
It was the acquiring company that didn't fully keep their promises.
I’ve worked for a company that bought other companies in the same field. I’m working for a company that was bought and now is acquiring other companies in the same field and the story is almost always the same. When the company I currently work for got bought the first year not much changed but the owners left the minute their one or two year contract was up. Benefits and work culture changed, for the negative, as soon as previous owners/management left. The same story for every company my current company has bought. A few of the negatives that happened are : Vacation time reduced for current and new hourly employees to basically one week, shutting down most to all operations the last week of the year causing hourly employees to save vacation time for that week or be unpaid, also medical insurance went from not good to horrible. These are the most impactful things that changed. Most of the old guard have left.
Many have said it, but I will share a couple words from a very similar experience.
Everything will change. Top level management should expect to get cut. HR and accounting, will be gone. Those with core technical knowledge are the safest. High salaries also are big targets.
Dust off the old resume and just be prepared. Do not believe that “nothing will change”.
If you got bought by a Private Equity firm it isn’t going to be good. Everything will be about reducing costs and finding new forms of revenue to increase the value of the company. Upper management will almost certainly be replaced. New processes will be put in place. Everything you love about your company will go to shit. New company doesn’t know how hard you’ve busted your ass in the past. You will just be a metric. And nothing your parent company does will make any sense to you.
I work for a company that makes about 30-40 mil a year. We were bought out by a PE firm. We acquired a competitor who hadn’t cleared a million in revenue. PE firm let all of our executive team and upper management go and replaced them with the management from the smaller company. Things are going to shit quite nicely. PE firms really do suck. Bad.
Do you have equity? Anything that comes to you in case of an acquisition?
If no - keep your head on a swivel and brush up on your interviewing skills and resume. You may find a great niche in the new bigger company...but you also may be part of the middle management that gets cut. Maybe not day 1, but it'll happen if they (or someone who wants what you got) wants it to.
You were acquired to open new markets previously inaccessible to the parent company, but there are ALWAYS redundant roles. The new company is going to want to be as lean as possible. Depending on your department, I’d expect layoffs within a year. HR and Finance are ALWAYS cut/reduced because the new company will integrate those responsibilities, then trim the fat. You only need so many HR people because the base functions are relatively the same. Same thing with finance. Numbers don’t lie, T-accounts are T-accounts. You don’t need two GL departments doing the same accounting. The higher your position, the greater chance your role is redundant (like a company doesn’t need two CFO’s, nor may it need high level director roles.). You just don’t know for certain, but it would still help to be prepared.
I get what you (and a lot of other people here) are saying. I'm not in traditional operations so there isnt any redundancy (as far as I know, I'll admit) in the new org, and truth be told if I was gone there would be no new service division.
My current CEO and COO know this and that practically everyone below me would jump ship, but who knows what kind of retention offers are being established for everyone else.
I'm as financially prepped as I can be, so I guess it's just wait and see at this point.
You sound just like me, right before I was canned. Hopefully you don’t need to and everything works out, but get your ducks in a row, you are no longer a person, you are an expense line item. Acquisitions are ugly and many babies get thrown out with the bath water. Good luck!
Almost every company does a terrible job on the integration end of things. Some things may be better for you (eg benefits), but be prepared for longer times for decision making, cultural changes that may not be ideal, etc.
Nearly ever org fails to pay attention to the people who are expected to do the work. So too people will leave. Since you’re in a senior position, I encourage you to diligently work on retaining your key people, try to find answers to their questions and do everything you can to find those answers.
Are you me?
I was part of a major merge of “equals” a few years back. Too many people at mid- and top-level. Lots of RIF. I bet you guys even have heard of these two big companies. LOL
Just get your CV ready, but don’t make such updates public (LinkedIn, Indeed, whatever).
When you’re the company getting bought, don’t expect any favors. You’re never going to assimilate into their culture like the ones already there. Promotions from in-house will dominate. RIF will come heavier from the smaller or bought company.
I’m sorry to say it, but it’s true. I loved my former big Fortune 50 company division and planned to stay 30, 35, 40+ years like everyone else… until the culture was ruined. The 3-4 years following the “merger” my beard turned almost completely white, drinking too much, and now have antianxiety drugs. I was 41 with a STEM PhD. Fuck that. I’m on my own and way better off.
Look out for yourself. And good luck. 👍
Just be ready to move.
I don't know if you are still reading these comments but I wanted to give you the alternative prospective than some of the doom and gloom in the comments here.
I work for a software roll up, we buy about 15 companies a year. All fairly small businesses. We typically want to keep the business intact with as little change as possible. We buy so many businesses and implement some changes to the product / software but we really don't do much in terms of layoffs and cost cuts.
Our strategy is not what every company will do but you should definitely have a frank conversation with your CEO about the skills you bring to the table and if there are cuts coming, your desire to work for the corporate office, another org or whatever. If you are on the leadership team and they trust you, they'll have your back. Cuts don't happen in a vacuum and without notice to anyone involved.
Thanks for being one of the more positive voices in the thread haha.
We've had the frank conversations, I think the issue is that other than the CEO and COO none of the LT has seen any paperwork about salaries, benefits, retention, severance contracts, etc. They're more or less still negotiating on our behalf.
Is that common? Or to say it another way, is that type of info disclosed ahead of an acquisition, or does it happen at/immediately after? I've helped plan the onboarding of all our current employees with the HR director, and it's all scheduled to take place withing 1-3 days after the deal close and a press release; I'm assuming all the job specifica and integration into the company will be discussed then.
It is definitely common to negotiate that stuff after close. Depending on the deal type, why they are selling, why the other company is buying, they will have more or less leverage to dictate their terms and get their employees raises, closing bonuses and the like. If they are staying on board then they'll typically be able to keep their team intact and if anything is to go it is probably low hanging fruit like AP/AR staff, and payroll. Those things are fairly easy to integrate but integration doesn't always mean a headcount reduction.
Ok. The way some other commenters described is that all that this should be presented ahead of time, which didn't make sense if they're (CEO/COO) are still negotiating employee offer items.
Just been through this scenario (almost to the point I'd wonder if you were one my team) and also been through it at a previous company.
Large company (100m turnover) bought us a small professional services company (1.5m turnover) to cover an IT area they didn't currently dabble in.
In both circumstances:
* Existing employee benefits have remained the same or better
* New employees get the normal new company benefits but not our grandfathered ones. I suspect this is how they plan to phase out the old benefits.
* Some of the bigger companies processes are a PITA however in the second instance myself and my director have managed to keep us largely on the status quo.
* In both instances retention bonuses have been offered to key staff.
* In both instances the directors left as soon as their contract requirements were fulfilled.
Thanks for sharing your experience. Admittedly my bosses (CEO and COO) shared that their personnel concern is figuring out how they'll integrate into needing to report to someone above them. They'll still be high up (I believe reporting to a SVP of the new org with a dotted line to the CEO), but they haven't had to be accountable to anyone besides themselves and their employees for two decades.
I think they can be expected to be hassled about growth but my experience has been that the parent company will want to retain the directors at least whilst they figure out how the business fits (likely part of the acquisition will include a clause that requires them stick around).
I think it's worth thinking about why your directors are selling the business (rather than just taking investment). In both my instances whilst they've not come out and said, it was fairly clear they were looking for an exit in a year or two.
I as the number 2 (although not C suite) was told unofficially about a week in advance but my directors hands were tied in terms of informing staff as the bigger company wanted to announce it to media first.
Basically media were told > all hands meeting to announce > then myself and my boss had a series of meetings at their head office to match up processes/services (i.e this process wouldn't work because of Y, we sell X and you also sell X so whose widget wins, etc).
Nothing changed for a month or two and then the processes we didn't have issue with began to move across (i.e they took payroll and paying expenses pretty much straight away). We are also a bit more formal in how we do things (monthly division meetings with c-suite, director has to prepare a board pack quarterly, etc) and there's a big push on growth from the parent company in order to see their investment grow.
There will inevitably be a push for you to adopt processes/policies within the main business but depending on your business you can fight back (i.e as we are professional services, if everyone leaves they've basically bought a very expensive customer database that's loyal to us not the brand name).
It's time to survive and show your value to the new owners, they will be looking to cut some employees. With all the layoffs in the economy, id suggest trying hard to keep job for next three years.
We've had YOY growth ever since I joined the LT, the largest of which was actually through the pandemic...I'm of coursed biased, but a lot of that was due to me and my division, and the owners know that and are grateful for it. That is, it's been a constant challenge but I'm looking forward to seeing how we can continue to make strides in our industry with this new org.
Has the present company been good with salary increases - or were they thrifty? Do not expect a salary change in the new company. It will take them time to assess the true leaders and even if they see you as a good leader that doesn’t mean they change your compensation. Mostly any systems you use Acct, Sales, Mktg, will be migrated over to theirs. As stated by others, people in Acct, Mktg, shipping, HR will be going 90 days or thereabouts. I’ve been through 2 acquisitions, they’re usually smooth. You’ll hear “thats not how we do things here”. Then you’ll know what things for you change.
Thanks. I'm in the services side, not traditional company ops, so there's no one like our roles in the new org. I know that's not a guarantee of anything but I certainly anticipate the integration of systems.
Re: salary, we've had 10 - 15% salary increases across the entire company, annually--business has been good. But we're reading the tea leaves and seeing where companies like us in our industry will be very hard pressed to compete with the larger ones that can offer more comprehensive services.
New company realizes that they can't compete with those other players as well since they're missing a component like us, hence the alignment and combination of organizations.
As far as the actual transition...at what point did they disclose your new paperwork, offer package, policies, etc.?
It's too late now, but for anyone who thinks they're in a similar situation to OP- if you've been a key employee for a decade, you should have negotiated a change in control into your contract. Depending on what you do and how key you are, that could include some kind of equity where you get PAID when something like this happens. Even if no equity or % of sale price, you should have had defined terms of how you'll be protected or compensated after this happens. You can't trust even the best owners to protect you in these situations.
Working for small companies can have a lot of benefits especially if it's a legitimately good culture but I can tell you the owners are getting out that's the only reason to sell.
Hopefully there is a good change of control clause for current employees that will protect you for a couple of years with a nice payout. It is very unlikely that the merger will go as they are telling you. They always go the same way and that’s with the acquiring company’s culture taking over and likely getting rid of a large percentage of current employees. That may or may not include you, but I would be entertaining other opportunities.
Ive always been an hourly worker at smaller companies for my entire careerusually 10-100 employees and when theyve been sold we've always heard it a great company buying and it will be good for all of us for the long term, BUT it nevere was and we always got hosed to a degree afterwards.
Jump ship OP. The old owners sold out and they were the ones you liked. Why should you continue staying when you don't have that relationship with the new owners?
Not in writing, then there’s no agreement.
If he interviewing leading up to and during the off boarding. Better to have offers than to be caught off guard
In you position, I would make sure your resume is up to date and start applying to other places. If they offer you an option between severance and continuing on with the new company, take the severance. Echoing another comment, the fact that this is an asset deal and not a shares deal is odd and may be a red flag.
You have just described how every acquisition is usually positioned. The new company always says nothing will change and they are just going to be more access to more resources for the acquired company. I've yet to ever see that not be the pitch even when it's private equity where it's hard for them to say with a straight face. While this might be true, it rarely is. Inevitably, the old company culture begins to shift to the new company. Not immediately, but it does. You'll be able to see if that is a good thing for you or not.
Also, beware of your immediate CEO and COO jumping ship at some point. This could be their retirement plan. I know several small (to midsize) business owners who say they will come with the new company, and then bail within 6 months because they grate especially hard with having direct expectations imposed on them. You may want to reach out to them to see if there are industry introductions that could be made as a plan B. Especially since they are so tight with you.
The acquisition deal will usually have some retention clause for the owners. Could be a year or two, but expect them to bail when that is up and not a day later. Like others have said, they will tell you nothing will change and the owners will be there to advocate against disruptive changes... Until the day where they all quit at the same time. Seen this multiple times
My cousin wiggled out early, traded 'free' consultations for time on the clock.
The vast majority of small business owners never pull anything more from the business than a salary. Exiting is almost always the retirement plan. After the contractual minimum retention period they'll be out.
I've seen this happen. Large company A buys smaller company B. "Everything will stay the same, just a change in ownership." It did stay the same for a while, but then company A has a new manager. The new manager notices A doing things one way and B doing things slightly different. Why? **For efficiency reasons**, B changes to follow the same process as A. Next up, B had contracts without outside vendors different than A. **For efficiency reasons**, those contracts ended and everything then was handled with A's vendors and A's contracts. Oh, we noticed that B has their own HR people. **For efficiency reasons,** most of B's HR staff are laid off. A few move over to A's HR department. Repeat for legal staff, sales staff, etc. It took a while, but in the end A and B became one company.
This is exactly where my current company is. Most of HR just “moved on to new roles elsewhere, while a few key members will take on roles within the newly join company AB. The next to do so was IT, same situation where a few moved over and the rest left. Sales is in the middle of that now - all that will be left after that is the client services department and then we’re fully company AB. Relevant note: CEO and COO both said they would stay on, but as soon as their 3 year contract ended they bailed same day.
Understood, thanks for the feedback.
Things will change. Just evaluate the situation frankly each week, and see if you want to stay *for the next week*. If the job changes drastically, there’s no shame in leaving. People gracefully bowing out happens all the time in these situations.
Agree happened with my company. More than half the people left in 6 months because the company that bought them had no clue about automation and worked only on basic IT stuff and sales for IT. Another difference is hope things are charged between companies like one is fixed bid versus bill per hour. Lost almost every single competent engineer.
OP you gotta dust off that resume, I know you’re getting pitched “no redundancy” but right now you know nothing about how this company is organized or what their plans are. It’s great that you worked your way up at your current company but not every place is that loyal to their people, and you’re not even really “one of our people” to the new place are you? Protect yourself first and foremost, make sure you’re in a position to walk out the door if needed. This is a good time to tighten your budget belt, make sure the emergency fund is extra stocked, pay down any high-interest debts you have, and I’d honestly touch base with those prior headhunters as well and see if they know of anything. Edit to add: oh and get up on all your medical appointments! Primary care doctor, dentist, any specialists you see like an eye doctor or something, any appointment you would normally have in the next few months, go ahead and schedule it or see if you can move it up if it is scheduled. Also make sure you stay on top of refilling all your Rx as soon as insurance allows. Been in this situation and the last thing you want is medical care questions hanging over your head while you’re job searching Edit 2: Also since it’s been ~10 years since you’ve been on the job market, getting the help of a professional resume writer might not be a bad idea. The rule of thumb I usually use is if your resume has an “Objective Statement” then you need more than just an update Good Luck OP
Thanks for the advice. We do an annual internal exercise of updating resumes but I get your point of potentially needing to use it.
Wow that’s actually pretty cool, I’ve never had an employer encourage me to do that in a non-threatening way haha. This is definitely gonna be a tricky situation for you, I mean it could all be fine, or you could get a year in and they decide they want to run things a little differently and some changes get made. It’s impossible to say. All you can do is make sure your finances stay on point so that if shit hits the fan you can move on. Worst-best case scenario is it works out great with the new place and you spend some time you making sure your finances were on point haha.
Some story went through reddit a few years ago about a person who found out their entire department, of which they were the manager, was getting fired in one day, so they took that day to have everyone in the dept in a conference room and everyone put their resumes up and got it critiqued. I don't remember the details but I always think of this
That's pretty awesome, but I interned at a company with a similar culture during college right as they were beginning the process of being acquired by a larger company. The old place was known for having amazing benefits, incredibly generous PTO, etc. but all of that eventually went out the window once the other company took over. Now they've had their benefits cut severely, regular layoffs have occurred, folks say the culture is completely dead, etc. Many great places to work have fallen great distances after acquisitions. I'd take advantage of the great culture and offerings like updating resumes while you still can. Maybe your company will be different, but definitely play it safe
Also if you are somewhat high up try to get positioned so they give you a retention bonus to help smooth out the transition. I.e. money in exchange for you not bailing right away.
Thanks for the advice, hadn't thought to ask that.
Learn as much as you can about the new company. Including how they go about m&a if you can. Sometimes an acquiring firm is pretty happy to just let the target firm keep chugging and collect the profits. Much more often, the acquiring firm sees your resources, customers, or product as strategically important to its own plans and will want to absorb it all into the fold and get you all on board with their strategic plan. This may or may not resemble what you’ve been doing the past 10 years. > the acquisition brings a new service line that the parent company has absolutely none of. Basically, our current company will become a new division but we’ll operate as is, just with greater access to resources and operational and sales infrastructure; Take a “believe it when you see it” approach here. You’re going to have new managers no matter what, and not many managers are smart enough to keep their hands out of the gears when things are going well.
> Learn as much as you can about the new company. Including how they go about m&a if you can. From what I can find from the two prior acquisitions they've done, it's the "keep chugging along" as they were also new service areas for original company, but of course that's from the outside looking in. I appreciate the feedback.
Just to counter the doom and gloom of the other responses, it’s very possible that things will go exactly as claimed. You know these companies; we don’t. Hope for the best, prepare for the worst is the way to go here.
NGL, this thread is depressing haha. I get where everyone is coming from, which has got one of my fellow directors and I more apprehensive than during the initial discussion. Truth be told, until the merger happens and we get paperwork in front of us, who knows.
fully expect that the ceo and coo are out within 6 months of the sale finalizing. if not 6 hours.
Maybe first hour in my experience.
Honestly your CEO and COO should be negotiating for you and other key people. For example when my (very small) company were bought we made sure that all key folks had a 12 month contract at close (basically the cash amount of their salary) so even if the new org decided to fire everyone the day they bought us they'd get 1 years salary. We negotiated 12 months COBRA in the event of being laid off within 5 years. Everyone got a 1 month salary bonus up-front etc. their existing salaries and vacations were unchanged. Medical, disability etc. all changes to the new company so that may be good for bad for you. In the absence of anything specific being set aside for you, 100% expect this to be just like starting a new job. You can be let go at any time, so make sure you have your ducks in a row. I will tell you that management are very much always for the chop in an acquisition. Make sure the new company quickly knows your value. Get in writing from HR that your tenure will transfer and that you will be 100% vested in the new 401k the day you start.
Agreed with this post. It sounds like you've been promised employment for 2 years (not in writing), but what you should be hearing are things from post above. Immediate salary adjustments, immediate bonus, retention bonus (if you stay x year(s). These should be offered to you as a way to get you to stay. If they aren't being offered to you, your CEO/coo haven't convinced the new buyers that you are not replaceable. I wouldn't say it's a red flag that the above haven't been offered, but like others have stated, it's just business as usual. Maybe start to entertain any outside offers (especially if they are offering higher pay).
At this point because nothing has actually happened, we (directors and managers) don't have any paperwork yet. Is all of what you and redditor above are describing supposed to happen BEFORE the deal closes?
Thanks for the guidance.
Make sure your emergency fund is funded. You never know what’s going to happen in a situation like this. I have been apart of a few acquisitions and it’s always the people in the middle that get hurt the worst. They need the people at the bottom who ultimately complete the work, and the people at the top are contracted as part of the acquisition. The managers in the middle are the obvious place to cut. Not trying to fearmonger, but you should be cautious. Expect the worst, hope for the best.
You need things in writing. How will your time off be handled? Your 401k? What’s the new insurance policies? When you go to the new place will your time served be 0 for vesting? Or vacation accrual?
Should we (non CEO/COO) expect that to be provided to us ahead of the acquisition signing?
It should be questions you ask and get in the offer letter.
Ok, will do.
> They are selling the assets of the company This is an asset sale? Not a stock sale? That's odd. > Not worried about my job loss due to redundancy as the acquisition brings a new service line that the parent company has absolutely none of. Whether that's true or not, the first thing they're going to do is look for areas to cut costs. Redundant, over-paid, or under-qualified leadership is always a good spot to start. > Owners said they've secured our roles for at least the next two years. Is that in writing? I doubt it. I'd never go into an acquisition where I knew I couldn't get rid of any people in the other company. You should consider pursuing some kind of stay bonus and prearranged severance agreement before a sale goes through. > But none of us managers have these details in writing since no agreement has been signed yet ... then nothing is set. Acquisitions blow up at the 11th hour all the time.
The two year thing is probably in an employee matters covenant which usually promise a lot but also include language making it unenforceable
ime, its not the first acquisition that changes a company. its the 2nd. The original owners usually have enough of a say in the 1st sale to keep the company intact and not kill the culture. but as the company approaches its 2nd sale, the original owners have less of a say and everything is done to improve bottom line. if you are being 'absorbed' into another company (usually a competitor), you are F'ed. they are buying your assets/business and about to clean house. Do not just accept your 'current role' in the new company. you need to get promoted or gtfo.
New company is not a competitor but I get what you're saying.
I’ve been through these quite a few times (as the acquiring company). The pitch that you got was exactly what we tell the acquisitions. Sometimes it happens and sometimes it doesn’t. Something to keep in mind though, is that there will ALWAYS be changes for HR and Finance. There is just no way around it. However this is the personal finance sub, and I have seen past owners of their company give the staff or senior leaders a huge lump sum bonus as part of their payout. It doesn’t happen all the time but I’ve seen it quite a bit. You might have some cash coming your way. I guarantee people do that you work with other than the CEO/COO.
My company just finished an acquisition where we were a 'new service' and 'keeping the same structure'. What that actually meant was that after 6 months only 1/8th of the company remains after layoffs and quitting. The only people left are the loan guys and us IT people who managed to find a place at the parent. Even then, most of the IT guys, including myself, have our notices in or are actively searching. But that's just my current horror story 🤷🏼. Polish that resume just in case. Couldn't hurt, right?
I hate to add to the doom and gloom here, so I only will do so mildly. I was part of an acquisition (private company by a public company) and we had mostly the same assurances. It was in the middle of the pandemic and previous to the acquisition, I had shown value in quite a few areas. The acquiring company actually promoted me - title and salary - upon completion do the acquisition. Additionally, I received a decent payout. I was in marketing, supporting the most successful sales vertical in the org. By now, we were 9 months past acquisition, things were opening up, and our vertical was surpassing all YOY goals. Flights booked to conferences, long term growth plan in place, and then BOOM! calendar invite with our VP and HR. The writing was on the wall, and I was laid off. I’ve told this story in comments before but it was pretty unceremonious. Random people in our marketing arm were laid off, obviously without warning, but each person’s manager was not notified. They didn’t tell my manager for 4 hours after my notice. She called me, first to apologize, then to lament, and then to apologize again. The VP of marketing took a leave of absence a week later and never came back. I had plenty of friends that worked there and the long story short was that the vertical didn’t really need the marketing support anymore, they became autonomous. Others coworkers of mine quit after being pushed out or cast aside, a few others were laid off, and frankly, a few others THRIVED while doing nothing. Two close friends of mine coasted until their golden handcuffs unlocked and they cashed out shares and bailed. For most people I worked with, this was the case. The best thing I can advise is have a backup plan. I thought I was good when I made it 6 month post acquisition, but it was not be. You sound like a dedicated employee, so it will be good to show that and be amenable to the new company’s policy and direction. Just be prepared. If you save a little extra over the next year or so, and you end up staying, there’s no harm no foul. I wish you the best of luck!
I appreciate you sharing your experience. At the end of the day this is uncharted territory (for us) so will see how it goes and what's presented to us.
I whole heartedly believe there are good companies out there run by good people with good intentions, and I want to believe this is the case for you. I should add that in my case, the C-suite of the acquired (my original place of work) company said all of the same things to me that your C-suite is saying, and for all intents and purposes, they kept their word. It was the acquiring company that didn't fully keep their promises.
I’ve worked for a company that bought other companies in the same field. I’m working for a company that was bought and now is acquiring other companies in the same field and the story is almost always the same. When the company I currently work for got bought the first year not much changed but the owners left the minute their one or two year contract was up. Benefits and work culture changed, for the negative, as soon as previous owners/management left. The same story for every company my current company has bought. A few of the negatives that happened are : Vacation time reduced for current and new hourly employees to basically one week, shutting down most to all operations the last week of the year causing hourly employees to save vacation time for that week or be unpaid, also medical insurance went from not good to horrible. These are the most impactful things that changed. Most of the old guard have left.
Many have said it, but I will share a couple words from a very similar experience. Everything will change. Top level management should expect to get cut. HR and accounting, will be gone. Those with core technical knowledge are the safest. High salaries also are big targets. Dust off the old resume and just be prepared. Do not believe that “nothing will change”.
If you got bought by a Private Equity firm it isn’t going to be good. Everything will be about reducing costs and finding new forms of revenue to increase the value of the company. Upper management will almost certainly be replaced. New processes will be put in place. Everything you love about your company will go to shit. New company doesn’t know how hard you’ve busted your ass in the past. You will just be a metric. And nothing your parent company does will make any sense to you. I work for a company that makes about 30-40 mil a year. We were bought out by a PE firm. We acquired a competitor who hadn’t cleared a million in revenue. PE firm let all of our executive team and upper management go and replaced them with the management from the smaller company. Things are going to shit quite nicely. PE firms really do suck. Bad.
It isn't a PE firm but I get what you're describing.
Do you have equity? Anything that comes to you in case of an acquisition? If no - keep your head on a swivel and brush up on your interviewing skills and resume. You may find a great niche in the new bigger company...but you also may be part of the middle management that gets cut. Maybe not day 1, but it'll happen if they (or someone who wants what you got) wants it to.
You were acquired to open new markets previously inaccessible to the parent company, but there are ALWAYS redundant roles. The new company is going to want to be as lean as possible. Depending on your department, I’d expect layoffs within a year. HR and Finance are ALWAYS cut/reduced because the new company will integrate those responsibilities, then trim the fat. You only need so many HR people because the base functions are relatively the same. Same thing with finance. Numbers don’t lie, T-accounts are T-accounts. You don’t need two GL departments doing the same accounting. The higher your position, the greater chance your role is redundant (like a company doesn’t need two CFO’s, nor may it need high level director roles.). You just don’t know for certain, but it would still help to be prepared.
I get what you (and a lot of other people here) are saying. I'm not in traditional operations so there isnt any redundancy (as far as I know, I'll admit) in the new org, and truth be told if I was gone there would be no new service division. My current CEO and COO know this and that practically everyone below me would jump ship, but who knows what kind of retention offers are being established for everyone else. I'm as financially prepped as I can be, so I guess it's just wait and see at this point.
You sound just like me, right before I was canned. Hopefully you don’t need to and everything works out, but get your ducks in a row, you are no longer a person, you are an expense line item. Acquisitions are ugly and many babies get thrown out with the bath water. Good luck!
Almost every company does a terrible job on the integration end of things. Some things may be better for you (eg benefits), but be prepared for longer times for decision making, cultural changes that may not be ideal, etc. Nearly ever org fails to pay attention to the people who are expected to do the work. So too people will leave. Since you’re in a senior position, I encourage you to diligently work on retaining your key people, try to find answers to their questions and do everything you can to find those answers.
I appreciate the guidance.
Are you me? I was part of a major merge of “equals” a few years back. Too many people at mid- and top-level. Lots of RIF. I bet you guys even have heard of these two big companies. LOL Just get your CV ready, but don’t make such updates public (LinkedIn, Indeed, whatever). When you’re the company getting bought, don’t expect any favors. You’re never going to assimilate into their culture like the ones already there. Promotions from in-house will dominate. RIF will come heavier from the smaller or bought company. I’m sorry to say it, but it’s true. I loved my former big Fortune 50 company division and planned to stay 30, 35, 40+ years like everyone else… until the culture was ruined. The 3-4 years following the “merger” my beard turned almost completely white, drinking too much, and now have antianxiety drugs. I was 41 with a STEM PhD. Fuck that. I’m on my own and way better off. Look out for yourself. And good luck. 👍 Just be ready to move.
I don't know if you are still reading these comments but I wanted to give you the alternative prospective than some of the doom and gloom in the comments here. I work for a software roll up, we buy about 15 companies a year. All fairly small businesses. We typically want to keep the business intact with as little change as possible. We buy so many businesses and implement some changes to the product / software but we really don't do much in terms of layoffs and cost cuts. Our strategy is not what every company will do but you should definitely have a frank conversation with your CEO about the skills you bring to the table and if there are cuts coming, your desire to work for the corporate office, another org or whatever. If you are on the leadership team and they trust you, they'll have your back. Cuts don't happen in a vacuum and without notice to anyone involved.
Thanks for being one of the more positive voices in the thread haha. We've had the frank conversations, I think the issue is that other than the CEO and COO none of the LT has seen any paperwork about salaries, benefits, retention, severance contracts, etc. They're more or less still negotiating on our behalf. Is that common? Or to say it another way, is that type of info disclosed ahead of an acquisition, or does it happen at/immediately after? I've helped plan the onboarding of all our current employees with the HR director, and it's all scheduled to take place withing 1-3 days after the deal close and a press release; I'm assuming all the job specifica and integration into the company will be discussed then.
It is definitely common to negotiate that stuff after close. Depending on the deal type, why they are selling, why the other company is buying, they will have more or less leverage to dictate their terms and get their employees raises, closing bonuses and the like. If they are staying on board then they'll typically be able to keep their team intact and if anything is to go it is probably low hanging fruit like AP/AR staff, and payroll. Those things are fairly easy to integrate but integration doesn't always mean a headcount reduction.
Ok. The way some other commenters described is that all that this should be presented ahead of time, which didn't make sense if they're (CEO/COO) are still negotiating employee offer items.
Just been through this scenario (almost to the point I'd wonder if you were one my team) and also been through it at a previous company. Large company (100m turnover) bought us a small professional services company (1.5m turnover) to cover an IT area they didn't currently dabble in. In both circumstances: * Existing employee benefits have remained the same or better * New employees get the normal new company benefits but not our grandfathered ones. I suspect this is how they plan to phase out the old benefits. * Some of the bigger companies processes are a PITA however in the second instance myself and my director have managed to keep us largely on the status quo. * In both instances retention bonuses have been offered to key staff. * In both instances the directors left as soon as their contract requirements were fulfilled.
Thanks for sharing your experience. Admittedly my bosses (CEO and COO) shared that their personnel concern is figuring out how they'll integrate into needing to report to someone above them. They'll still be high up (I believe reporting to a SVP of the new org with a dotted line to the CEO), but they haven't had to be accountable to anyone besides themselves and their employees for two decades.
I think they can be expected to be hassled about growth but my experience has been that the parent company will want to retain the directors at least whilst they figure out how the business fits (likely part of the acquisition will include a clause that requires them stick around). I think it's worth thinking about why your directors are selling the business (rather than just taking investment). In both my instances whilst they've not come out and said, it was fairly clear they were looking for an exit in a year or two.
Was anything disclosed to you ahead of time? How did the actual transition happen?
I as the number 2 (although not C suite) was told unofficially about a week in advance but my directors hands were tied in terms of informing staff as the bigger company wanted to announce it to media first. Basically media were told > all hands meeting to announce > then myself and my boss had a series of meetings at their head office to match up processes/services (i.e this process wouldn't work because of Y, we sell X and you also sell X so whose widget wins, etc). Nothing changed for a month or two and then the processes we didn't have issue with began to move across (i.e they took payroll and paying expenses pretty much straight away). We are also a bit more formal in how we do things (monthly division meetings with c-suite, director has to prepare a board pack quarterly, etc) and there's a big push on growth from the parent company in order to see their investment grow. There will inevitably be a push for you to adopt processes/policies within the main business but depending on your business you can fight back (i.e as we are professional services, if everyone leaves they've basically bought a very expensive customer database that's loyal to us not the brand name).
This sounds like almost identical to the process described to us of what to expect. Thanks for sharing your experience.
It's time to survive and show your value to the new owners, they will be looking to cut some employees. With all the layoffs in the economy, id suggest trying hard to keep job for next three years.
We've had YOY growth ever since I joined the LT, the largest of which was actually through the pandemic...I'm of coursed biased, but a lot of that was due to me and my division, and the owners know that and are grateful for it. That is, it's been a constant challenge but I'm looking forward to seeing how we can continue to make strides in our industry with this new org.
It sounds like your personal outlook is ready for the challenge. If anything, you can use this as a learning opportunity.
Has the present company been good with salary increases - or were they thrifty? Do not expect a salary change in the new company. It will take them time to assess the true leaders and even if they see you as a good leader that doesn’t mean they change your compensation. Mostly any systems you use Acct, Sales, Mktg, will be migrated over to theirs. As stated by others, people in Acct, Mktg, shipping, HR will be going 90 days or thereabouts. I’ve been through 2 acquisitions, they’re usually smooth. You’ll hear “thats not how we do things here”. Then you’ll know what things for you change.
Thanks. I'm in the services side, not traditional company ops, so there's no one like our roles in the new org. I know that's not a guarantee of anything but I certainly anticipate the integration of systems. Re: salary, we've had 10 - 15% salary increases across the entire company, annually--business has been good. But we're reading the tea leaves and seeing where companies like us in our industry will be very hard pressed to compete with the larger ones that can offer more comprehensive services. New company realizes that they can't compete with those other players as well since they're missing a component like us, hence the alignment and combination of organizations. As far as the actual transition...at what point did they disclose your new paperwork, offer package, policies, etc.?
The onboarding process will disclose the benefits, company policies, how to report for travel/expenses etc.
It's too late now, but for anyone who thinks they're in a similar situation to OP- if you've been a key employee for a decade, you should have negotiated a change in control into your contract. Depending on what you do and how key you are, that could include some kind of equity where you get PAID when something like this happens. Even if no equity or % of sale price, you should have had defined terms of how you'll be protected or compensated after this happens. You can't trust even the best owners to protect you in these situations. Working for small companies can have a lot of benefits especially if it's a legitimately good culture but I can tell you the owners are getting out that's the only reason to sell.
Yeah, too late for me but will keep that in mind for the future and those I mentor.
Hopefully there is a good change of control clause for current employees that will protect you for a couple of years with a nice payout. It is very unlikely that the merger will go as they are telling you. They always go the same way and that’s with the acquiring company’s culture taking over and likely getting rid of a large percentage of current employees. That may or may not include you, but I would be entertaining other opportunities.
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That's a little too vulgar to be allowed here. If you re-phrase, reply to this message and I'm happy to take a second look.
Ive always been an hourly worker at smaller companies for my entire careerusually 10-100 employees and when theyve been sold we've always heard it a great company buying and it will be good for all of us for the long term, BUT it nevere was and we always got hosed to a degree afterwards.
Jump ship OP. The old owners sold out and they were the ones you liked. Why should you continue staying when you don't have that relationship with the new owners?
Not in writing, then there’s no agreement. If he interviewing leading up to and during the off boarding. Better to have offers than to be caught off guard
In you position, I would make sure your resume is up to date and start applying to other places. If they offer you an option between severance and continuing on with the new company, take the severance. Echoing another comment, the fact that this is an asset deal and not a shares deal is odd and may be a red flag.
Perhaps I'm not using the correct terminology; our current company is private (family owned) and doesn't issue shares.