10 Signs the Company's Going To Be Sold. What Next?!
So you're a marketing or promotions manager, a news reporter/anchor, a producer, or the
company's top salesperson, you're definitely not a CFO, so how can you tell if your company or news station's in financial distress or maybe there are rumors of an impending sale, merger, acquisition? If you see these signs, what should you do next?
First, what's happening when a company is put on the market or already in play?
When entities are being marketed for sale, the final price will be determined through due diligence (research and validation of the data the seller provides to the buyer) and likely it's some multiple of cash flow, revenue, and/or profitability. For example, if the agreement between parties is that the final sale price will equal 10 times the earnings (EBITDA), every additional dollar earned will bring an additional $10 in sale price.
With that in mind, you can get a better understanding of what might be going on where you work. Literally every dollar not spent can bring ten dollars more in sale price! So the caveat is that this is a very simplistic description of a complicated process but it does accurately identify behavior that you might be seeing.
Revenue is down and has been down for months. You might not have visibility to revenue but there are telltale signs - advertisers and clients are leaving or longtime sponsors start to pull the plug. Viewership/ratings are in decline. Share is declining, or maybe flat, but you continuously finish at the bottom of the market or industry. There have been dozens of changes in management and talent but the result has been the same. Don't get caught up in the recent hyperbole of a 'huge' move in share or revenue. Big percentage gains of small numbers are still small numbers. People get fired after their biggest month or year ever.....all. the. time.
Critical people are leaving and their positions are not being filled. In fact, requisitions are not being approved and responsibilities get spread among the staff. You pick up another shift, someone else's story or project, or maybe a new group of clients. Your manager is selling you on what a great opportunity it is for you!
Equipment and technology items all of a sudden have long lead times and orders for things like office supplies are being held up. You're told that they are consolidating orders to save on shipping or to get bigger discounts. You hear management say things like "wow, did you know we spent $22,000 on office supplies this year?" Yeah, something is going on.
Trade shows or conference attendance starts to be cut back or even discontinued altogether. In fact, one or two people from the marketing or events department are reassigned to something else.
Travel moratorium is put in place. Your manager or someone two layers up now has to approve travel or travel related expenses. Things like gas cards, mileage, vehicle pool, mobile phone expenses, etc are all being scrutinized like never before.
One of my favorites, schedules for maintenance and services inside the building are changed. Offices aren't cleaned and trash emptied daily, or even every other day. It's now weekly. Trash starts to pile up a bit. The shredder and paper drop boxes are full (might be from people preparing to leave .... see below). Cafeteria service gets scaled back in offering or hours or both.
There are a number of supplier switches and moves going on. Long term deals with big rebates and incentives are being cut with new companies. Relationships that go back for decades are unraveled.
Executives from areas like finance and human resources are leaving the company all of a sudden. Like long term suppliers and vendors, you start to see people that were extremely loyal to the company for years depart for other companies or "retire".
Sales orders or ad packages start to get pulled forward. Discounts are given for future orders if clients will take them early. Unheard of sales terms are being offered to clients.
Lot's of suits in the office. There are going to be executives and accountants in the office. The new faces are going to be spending time in finance, accounting, sales, and human resources. Depending on how confidential the transaction needs to be, sometimes there are offsite offices established at a local hotel. If your HR and Finance leads are spending lots of time in offsite meetings, something is usually up.
So what should you do now?
Ok, so take nothing for granted. Things can could turn out much differently than you think. Let's say you are a long term employee of the acquiring company. Maybe you work at Sinclair Broadcast Group and you bought the Tribune station in town. Regardless of position, that does not mean you and your role are going to continue as is. Nope, in today's world of acquisitions and mergers, the safest legal ground moving forward is to take a "best of the best" approach to headcount. Yep, it's that cold. A force ranking. Come out on top, you stay. Come out on bottom, you are 'rationalized' or 'optimized' regardless of tenure. In fact, in some industries, tenure can actually play against you. It's illegal but in many businesses, talent gets 'timed out'.
What you need to know or what you should be doing:
DO NOT RESIGN unless you have a solid opportunity in hand. I've seen people leave too early in the process and miss opportunities for a new role or significant financial opportunities. Two things to think about on this topic:
The company needs to continue to operate and deliver returns/audience throughout the process of the sale. If you are critical to the operation or material to the sale, there can be retention bonuses or compensation tied to your work. I have received, and I have offered bonuses to key people if they would stay through the sale. Sometimes this can equal 2x or 3x your normal compensation.
Severance funds are built into the transaction. The companies involved in the sale have put funds aside to help staff in transition. In fact, the acquiring company usually makes sure that this funding is adequate. Why? They are the surviving company and brand and don't want their name tarnished in the marketplace on Day One of the acquisition.
You DO need to begin to prep your professional package for market. Specifically:
Resume updated. A format that includes a high level career summary and relevant competencies is key. You are going to have to explain how your skills and experience are transferable to new markets, roles and industries.
LinkedIn profile update. This isn't just copy and paste of the resume. This is your opportunity to bring your resume to life with images, recommendations, special skills, interests, connections, and most importantly, highly searchable keywords that best describe not where you are from, but where you are going!
Clean up your social media. You think it's buttoned up but it usually has a couple of opportunities. That one time you changed the setting from 'friends only' to 'public' on a post or picture can be a game changer to an interviewer or hiring manager.
Finally, you need to continue to have a professional goal of over achievement or outperform in your current role. The company is still paying you to show up and deliver at a high level. People will be watching and this could turn out to be a terrific opportunity on two levels:
In the new world, the acquiring company will be leaner than the sum of the two organizations before the transaction. It's why they are buying your company. Consolidate where you can to improve the cost basis while increasing revenue. Many times, out of this process will come positions of greater responsibility and compensations. The new org chart and shifts or time slots might still be fluid and you have a chance to move up. Why let a bad attitude or work ethic now kill that opportunity you've worked so hard for.
Career management is about networking. What better opportunity to network your brand on a broader scale than a transaction that might spread managers and executives across a number of different companies, organizations or new stations? We've all seen what happens when an influential executive leaves a company for another and they recruit talent to go with them. If your head's not in the game during this transition, you might be missing an opportunity somewhere down the road. Everybody's in play, now's a great time to make a first impression or solidify your professional image.
In summary, these are trying times. EVERYONE is in stress mode and you aren't going to see the most professional behavior from even the most seasoned executives. I've been through a number of difficult transactions. I've been on both sides of the deal. There are only two things you need to be thinking about. One, continue to excel in your role day in and day out. Two, get your professional package dialed up and shining. You might be staying, you might be leaving. Put your best foot forward either way!
Be Bold. Be Great. Be Timeless.
About Mike McNamara:
Mike has held C-Suite, Executive and Senior Sales, Marketing, Business Development, and General Management roles with Equifax, Cox Enterprises, WW Grainger, and Federal-Mogul Corporation. Mike has led sales, service and operations organizations of over 1,500 associates and accountable for P&L responsibility in excess of $250M.
Dedicated to giving back, Mike formed The MBAR Group in 2009 with the sole intent of providing pro bono career and business consulting services to the underprivileged and underserved. Today as founder and CEO of TalentBlvd, he coaches a number of high profile business and media personalities as well as holding advisory board positions guiding a number of multimedia and small business startups.
Mike earned his MBA from the Kellogg School of Management, Northwestern University and holds a Bachelor of Science degree from Michigan State University. He is a past chapter President of the American Marketing Association. Mike and family split time between their adopted state of Missouri and family home in NW Michigan where their philanthropic causes include The Kingdom House – St Louis, BACN in Benzonia, MI., and Samaritan’s Purse, Boone NC.