Life after Lockdown: Managing corporate finance communications

It is widely predicted that once lockdown is over, there will be a spike in corporate finance activity.

Some companies, such as BooHoo and Domino’s Pizza, that have emerged financially robust will be looking for opportunities to snap up weaker competitors. Conversely, many business owners will want out.  Some will feel daunted by the prospect of slogging their way back to a position of strength, perhaps still financially and emotionally scarred by the protracted recovery from the last financial crisis.

Meanwhile, there remains a lot of private equity money sloshing around looking for a good home.

Communication Strategy

Whatever the motive behind an acquisition or disposal, all transactions have one thing in common – the need for carefully managed communications.  This is especially important if job losses or redundancies are involved.

We are frequently appointed to handle the communications around a deal.  This can involve anything from drafting memos, scripting speeches and creating presentations to be delivered to staff, through to handling all external communications about the deal such as press statements, newsletters and brochures.

In order to satisfy the competing demands of the various parties involved in a deal, we invariably have to use tact, diplomacy, sensitivity and a fair bit of professional steeliness.

Everyone has a slightly different priority:

• Business owners exiting a company through an outright sale or management buyout (MBO) will want to ensure they have a say in the messages conveyed to staff, customers and suppliers.  In most cases, they will insist that any reference to the amount they’ve pocketed from the transaction is not publicised.

• Buyers will be keen to convey the benefits of the deal to everyone affected, stressing the growth potential, their plans for the future and the symbiotic ‘fit’ with their existing holdings, while avoiding any firm commitments about staff numbers just in case a little bit of consolidation is required.

• Venture capitalists and private equity investors will want to reassure their funders about the soundness of the rationale behind their investment and why it is a great addition to their portfolio. They, too, will take care to avoid promises they might not be able to honour.

• Meanwhile, advisers on either side of a transaction will simply want to shout about their involvement and expertise in the hope of attracting similar instructions in the future – just like this.

Deal Execution

It really is a minefield!  After handling such communications for nearly three decades, one thing still puzzles us:  why are most deals still completed in the middle of the night?

Strategic Planning

Anyway, if you’re a business owner (or one of their professional advisers) contemplating a sale at some point in the future, remember to factor communications into your plans. Boosting the profile of your business with regular positive stories will position you as an attractive proposition while also putting you on the radar of potential acquirers.

All too often, corporate finance transactions focus too much on the money, overlooking the value that a few choice words can also deliver.