How to Control the Narrative During a Company Buy-Out
When Car Guys Collision Repairs CEO and COO, Dave Mitchell and his son, DJ, were approached by Joe Hudson’s Collision Center about purchasing the 13-shop business, both were concerned about two things: their position in the company after the takeover and how employees would be treated under new ownership.
“We really wanted to make sure that our employees were as comfortable as possible during the transition,” Dave Mitchell, CEO says.
Starting from the ground up, Car Guys Collision Repairs was a father-son operation that grew into a 13-shop business. With a history of buying and selling up to 100 collision repair centers, Mitchell knows how new ownership can impact a shop.
“My biggest concern was that employees were taken care of and had an opportunity to grow,” Mitchell says.
After hitting it off with Joe Hudson’s Collision Center, combined with meetings at both companies, Car Guys began to take steps toward selling the business and ultimately preparing for change in the company.
“I’m a little bit of an old-school guy,” Mitchell says. “I can tell when I talk to people how I feel about them, [and] we hit it off real well.”
When it comes to informing staff about a new takeover, there are few key steps to take in order to stay in charge of the narrative.
Have an Answer
When outside interest visits the shop, rumors can spread when another company makes an appearance. In order to stay ahead of the rumors, prepare for questions that may hint toward a company change
It’s common to get asked about selling, Mitchell says.
“I have been asked that question most of my career,” Mitchell says. “My position is and has always been I would look at anything that made financial sense for the company and my family; there is almost always a number that will motivate someone to sell.”
Find a Confidant
If an owner is approached and he or she needs someone to talk with about the potential plan, it’s important to determine who can be trusted with confidential information. In order to avoid rumors or here-say, select someone who you can fully trust in your business.
For Mitchell, the most trustworthy person was his CFO and son, DJ, who also was involved in meeting with the new ownership. According to Mitchell, the entire process from Joe Hudson’s Collision Center’s first meeting until closing took around 8-9 months and was coupled with various in-person meetings with both Joe Hudson’s Collision Center and Car Guys Collision Repairs.
Formulate a “Must-Know-First” List
The moment the deal begins to take place, it’s important to figure out who should be informed right away. When selecting who should know first, pick out people who will instantly be impacted by the decision.
Some of the folks in the must-know-first category for Mitchell’s business included the company’s leadership team, managers, and key insurance companies.
“We were prepared; we signed the agreement I think at about 2 p.m. one afternoon and by 3 p.m., we were on the phone with our people,” Mitchell says. “We contacted insurance companies by phone and followed up by email.”
When a company is acquired, it’s important to let the employees know after all of the must-know-first contacts are informed. Be ready to answer any employees questions or concerns about the move.
In order to keep everyone aware of the situation, Mitchell let employees know an hour after managers were told about new ownership.
“At the end of the day, we emailed all employees telling them we had signed a deal with the intent of selling Car Guys Collision Repair,” Mitchell says. “We told them we intended to stay on, we gave them the name of the potential buyer and the timeline.
“We also told them we would keep them updated and asked if anyone had any questions or concerns to call my son, DJ.”
It’s important to let employees know right away, Mitchell says.
“If you have a relationship with your employees, I think it’s probably the right thing [to do] to let them know sooner than later.”
After the change has sunk in, be available to talk with employees and customers about the future of the company. For some, new ownership could turn those away from a company they previously supported.
For Mitchell, he emphasized that the new owner takes care of the employees and has positions for DJ and Mitchell in the new business.
“We wanted to make sure that we could have some involvement in the operation to ensure a smooth transition for employees, insurance partners, customers as well as the buyer,” Mitchell says.
Today, Mitchell will serve as an advisor to the company and DJ will now work as a regional director.
“We contacted our customers [about the change] as needed,” Mitchell says.
Once everything is prepared, Mitchell made a point to get all of the head departments together for an in-person meeting about the move.
“The next week [after the company announcement], we called all of our managers into a room and went over things,” Mitchell says. “[We said], ‘This will probably take place in a month or two; here’s everything we know, and we’ll tell you as things develop,’” Mitchell says.
In addition, Mitchell went out of his way to let others outside of the shop know about the future of the business.