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How key employees play a role in a business acquisition

On Behalf of | Jul 29, 2016 | Mergers & Acquisitions


When most business leaders in Louisiana think about growing a company by engaging business partners about options, they probably think about mergers and acquisitions. There is no doubt that mergers and acquisitions are some of the best options to expand operations and, hopefully, increase profits. But, what exactly is a Louisiana company hoping to gain in a merger or acquisition? In many cases, it is more than just the assets, logo or good name involved – it is also the company employees who are in place at the time of the transaction.

The fact is, the talent and skills of the employees who are working for the company to be acquired can be a crucial asset that is at stake in any potential deal. And, if those employees are not excited or supportive of merging or being acquired by another company, the whole deal might fall through. That is why, as part of the due diligence process before the deal is complete, it may be necessary to “recruit” particular employees to get onboard with the transaction. Why? Because if it is those employees that the purchasing company values, and those employees aren’t behind the transaction, they could just leave and find another job. Or worse, start a competing company.

So, what can an acquiring business do to entice those crucial employees to stay after the merger or acquisition is complete? Well, for starters, the compensation packages for those employees may need to be adjusted to reflect the appreciation the company has for their willingness to go through what could be a difficult overhaul of corporate strategy. The acquiring company may also seek the input of those coveted employees to get their thoughts on how the work environment should function.

In is important for Louisiana business to remember that companies are made up of more than just assets and name-brands. There are people who are responsible for making the company appealing enough to be targeted for an acquisition or merger in the first place.

Source: FindLaw, “Mergers & Acquisitions: A Strategy for High Technology Companies,” Accessed July 23, 2016