Estimated reading time: 4 minutes

Punching Out: How to Announce a Deal

Congrats! You’ve sold your company, and now it’s time to celebrate by making an announcement—from the beach, golf course, or the deck of a round-the-world cruise, right? In fact, it really is better if the announcement has some careful thought and planning, and this means spending a little more time in the office working on the post-sale transition.

In many private deals, the announcement often gets ignored until the last minute. Yet, how the deal is announced is critical to the short- and long-term success of both the buyer and the seller. Until now, you kept the deal quiet, as both sides spent months focusing on due diligence and the purchase agreement negotiations. But now it’s time to tell everyone, and non-public companies usually don’t have a PR department or consultant to help.

Especially in the PCB and PCBA industries, where everyone knows everyone, word spreads quickly. So, it’s important to consider who you should tell first. Most owners first inform their employees, followed by customers, suppliers, and then the public. Each recipient has their own concerns, but assume that once you tell one group, everyone else will know, so carefully word the announcement for general consumption.

Start With Your Employees
When both parties are private companies, owners typically begin sharing the news with their employees since they are the most likely to freak out and start sending out resumes. They start with top management—who may have already been part of the deal process—and then work their way through the rest of the staff. The merger of two companies and two cultures starts with the announcement, so be as open as possible. Employees can smell a fishy story a mile away and may have painful experiences with prior M&A activity.

Emphasize the positives of the deal: Employees may be getting better benefits, more resources, stock ownership possibilities, ping pong tables, or other positive perks. Employees will generally be happy for an owner who has worked hard and is finally retiring, but they will also be worried about their own livelihood. If the owner(s) will be sticking around for a while and/or maintaining ownership in the company, it helps ease concerns.

Mitigating Disasters With Customers
Customers may have seen total disaster mergers before. A carefully worded announcement will help calm their nerves. Point out the positives in the deal, such as access to a wider variety of products, better access to investment capital, or the chance for a one-stop-shop approach. Customers might have been nervous that “Old Joe” would retire without a succession plan and feel relieved to have a new supplier who is more stable and prosperous. As part of due diligence, the buyer may have already met with some of the top customers, so the announcement is more of a formality. Still, any business change is an opportunity for customers to shop around. When done well, you open an opportunity for more business.

Why Suppliers Are Concerned
Suppliers will be worried about either delayed payment or not getting paid at all. Just like with employees and customers, suppliers have experienced bad M&A deals. On the other hand, they will be interested in doing more business with the buyer, especially if the buyer is well-financed.

A Wider Message
The public announcement is usually last, but because the rumor mill will be spinning like crazy, don’t wait too long. Private companies are not under the same obligations as publicly traded companies, and often wait weeks or months to announce deals, either for strategic or competitive reasons. Remember, a public deal announcement is an effective way to reach a wider variety of potential customers, executives, suppliers, and other interested parties.

Because these announcements will be read by a wide variety of audiences, tread carefully.

• Control the message: Don’t leave it to rumors; focus on the deal’s positive aspects and strategic benefits.
• Honor the agreement: It’s typically stated in the Letter of Intent or purchase agreement that press releases must be mutually agreed upon, so work carefully with the other party.
• Learn from others: Review other deal announcements from inside and outside the industry to see how they handled different situations, both good and bad.

You have spent quite a bit of time thinking, planning, and executing this deal. Making the announcement properly will give everyone more peace of mind and your time on the beach ever so sweet.

Tom Kastner is the president of GP Ventures, an investment banking firm focused on sell-side and buy-side transactions in the tech and electronics industries. GP Ventures has offices in Chicago and Tokyo, with five people in total. Tom Kastner is a registered representative of, and securities transactions are conducted through StillPoint Capital, LLC—a Tampa, Florida, member of FINRA and SIPC. StillPoint Capital is not affiliated with GP Ventures.