How communicators can stay ahead in the chaos of an M&A transaction

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Mergers and acquisitions are high-stakes stuff: for the buyer, its competitive position, the ultimate success of its strategy and the trajectory of its stock price are on the table. For the seller, there are often worries about what will happen to company culture, brand, and job security.

At the same time, with teams of lawyers, bankers and other advisors involved, a deal can feel like the proverbial kitchen with too many cooks. For communicators, the challenge is acute, as each of those groups has an opinion about how the story, rationale and messaging of the transaction should be conveyed to various stakeholders, including employees, investors and media.

Each of the aforementioned chefs is coming from the right place, and chances are they recognize that both early and ongoing communications are critical to a deal's ultimate success or failure. After all, if the transaction isn’t embraced by employees on both sides, or if investors feel the story isn’t clear enough to support it, even the best can falter.

From my M&A experience in the North American financial services industry, there are a number of effective ways to ensure communications considerations stay front and center in a deal scenario.

Get a seat at the decision-making table ... before it’s even set. Depending on your company’s way of doing things, you may be brought into a deal with just a few weeks before the public announcement. If that’s the case, you’ll be playing catch-up with the other people involved, and you’ll constantly be reacting to developments, rather than steering them proactively.

Before a deal ever gets announced, make sure your department is on the same page as your corporate development, strategy and investor relations (IR) teams. Set up a meeting yourself, or get the head of your department to do it, if you’re in a more junior role. Ensure that you and your partners understand the value each brings in helping the transaction land successfully. And, more selfishly, get them to understand the role your function can play in telling a deal’s story internally and externally.

When this is done well, your corporate development and IR partners will advocate for you in front of your company's senior leaders, which will ensure you're brought in earlier in future deals.

The ideal end-state here is that you’re signing a non-disclosure agreement about a deal at the same time as your investor relations colleagues, so that you can work as a synchronized team, instead of at cross purposes. Speaking of which…

Make best friends with your IR group, if you haven’t already. They are a font of context, information and financial knowledge that communications teams leverage all too rarely. And because most IR teams report to the Chief Financial Officer, odds are that they will have the most current information about a deal and its status earlier than you will.

Whenever possible, I try to invite myself to review sessions of the IR materials being created (the investor deck, the analyst conference call script, et cetera). This not only keeps me up to date, but also ensures I’m aware of the challenges and questions my colleagues in IR are grappling with.

It’s important to remember that while both you and your IR colleagues are working on communicating the deal, you are doing so with very different audiences. For example, for a communications team, it may seem natural to point out to the media that the deal you’re announcing is your company’s largest acquisition to date. But for your IR colleagues, you could be creating a major headache, as emphasizing the deal’s size may be creating the perception that your company just paid a very full price. That might not be something IR wants to communicate to investors at all.

That’s why having a healthy and established relationship with IR before a deal lands in your lap is so critical. That way, you understand each other and what you’re focused on accomplishing from the start.

Get the first drafts of everything done as soon as possible. I remember working on a multibillion dollar acquisition where I locked myself and two other colleagues in a conference room for three hours, and we wrote the first draft of the announcement press release. While the financial terms and closing timeline continued to evolve until the day before announcement, the core story didn’t mutate too significantly from that first draft.

If you do a good job capturing the deal’s narrative, my rough estimate is that 75%-80% of your first-draft announcement is likely to survive to the finish line. There will be lots of specific word-choice edits and legal vetting of all documents, but once senior leaders agree on the bulk of the deal's strategic narrative, its essence tends to stay relatively constant.

Getting the early press release down on paper also lets you turn attention to the other, equally important items on the deal’s to-do list: employee communications, the media list and spokesperson selection, among others.

Lastly, don’t lose sight of your long-term goals and your role. Fundamentally, deal communications are no different from anything else you’re tasked with communicating: you have to be engaging, compelling, emotive and innovative in the channels you use. As always, it’s important to truly understand your audiences. Typically, those include your company’s employees, the target company’s employees and the media. You might also be tasked with aspects of government and regulatory communications, in addition to customer communications.

How will you address these groups so that they easily and clearly get answers to their most pressing questions, and also understand the strategy behind the transaction? What role will your leaders play in conveying that information, internally and externally? And what happens post-announcement?

In a deal, it’s easy to get swept up in the immediate excitement of the transaction. But keeping a broader, longer-term view goes a long way to assure ultimate success. Think about how the news you’re announcing could be woven into your existing communications strategy, for example. Is there an opportunity to showcase the transaction and its early performance at town halls, or at your annual meeting? What about a blog post on your company’s intranet? A real-time Q&A with senior leaders? Announcement day is just the beginning!

I hope you enjoyed the post, and if so, that you’ll take a moment to like, share or leave a comment below!