The seller, the buyer, and the broker all have a vested interest in keeping the sale of your HVAC company confidential until it’s complete. Almost all the time, they succeed. It’s rare that word of the sale leaks, but when it does, it requires a swift and organized response.
I’ve only seen it happen once in my career as a broker. The buyer filed with the state to change the company name on the HVAC license. Normally these changes take weeks. But some state worker was on the ball and made the change within a couple of days. When a tech went to pull a permit, he discovered the state license had a different company name. It’s one of the worst ways workers can find out about a company sale.
Even though it’s challenging, there are plenty of good reasons to keep the sale from your staff until it’s complete. The biggest one is that no sale is final until it’s final. Having a deal fall through is hard enough for the owner, but it could create chaos for the workforce as well if they know about it. Your goal as an owner is to keep productivity and operations as normal as possible during the deal. Keeping things quiet until everything is finalized is your best hope of doing that.
Most people are uncomfortable with change, and as soon as your staff finds out about the sale, they’ll start to worry. What kinds of changes will the new owner make? What will happen to my job? Will I even have a job? Some workers may even start to look for new opportunities. Your business could suffer needlessly if rumors and speculation about the sale start to spread.
So what’s the best course of action if the news of the sale leaks? The first thing you should do is get together with your buyer. You’ll need to be on the same page about what to do, and you’ll need to act quickly.
My recommendation would be to assess how far along the deal is and determine if you can finalize it right now. If you need more information, get it. If you’re waiting on a decision from a lender, start calling. If it’s just a question of getting together to sign the papers, sign them tomorrow. Better yet, sign them today. Get the deal done so you can announce it as final.
The more time it takes to get the deal done, the more time there will be for rumors and misinformation to spread. Speed is critical at this point.
Then you’ll both need to prepare to address the company. In almost every case, a sale improves the situation for the customers, the staff and the financial health of the business. It’s your job to help the staff understand what’s happening and why it’s a good thing for them.
Explain your reasons. “You all know I’ve been thinking about retiring for the last few years. My wife and I are ready to step away from the business, but we wanted to keep what we’ve built going strong. We’ve found a company and an owner who shares our values, has a great reputation in the industry, and has the resources to make some improvements and purchase equipment that are long overdue. The new owner has a lot of energy and some great ideas he’s ready to share with you.”
Most employees don’t realize that this is a pivotal moment in their careers – in a good way. They have more power with the new owner than they ever had with the former owner. The new owner will rely on them for advice and information about the best way to get things done. Some owners pay retention bonuses and raise pay for key employees to make sure they stay through the transition. You should encourage employees to stay, even if they express unhappiness with the changes. If they look for a new job, they’ll have to get used to everything changing. If they stay on the job, most of what they do will stay the same. If after a few months, they’re unhappy, they can consider moving on. But it would be foolish to leave before you know how things will play out.
It’s doubtful that news of your sale will leak to your employees, but it’s a good idea to have your announcement speech planned in advance. Work with your buyer to list all the reasons the sale is a good idea for the company and its people. You can be prepared for anything, as long as you act quickly, remain calm, and be completely transparent and honest with the people who have made your company the success it is.
About the author: Patrick Lange
Patrick Lange is an experienced HVAC-specific business broker with Business Modification Group based in Horseshoe Beach, Florida. He has a unique background in financial planning and has even owned an HVAC business himself. This makes him well suited to working with some of the most successful HVAC business owners in the country. Specializing in companies with 1-10 million dollars in revenue, he maintains a network of buyers and sellers in the industry. He has sold more HVAC businesses than any other broker in the United States over the last three years and is currently the President of the Business Brokers of Florida (North Florida District.)
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