CEO Series: Leveraging Acquisitions to Empower Employees in a Buy & Integrate Strategy

CEO Series: Chapter 2
Written by Anthony J. D'Ambrosi, CEO of Abacus Group

In the first chapter of my CEO Series on Buy & Integrate M&A Strategies for Managed Service Providers (MSPs), I focused primarily on the extraordinary benefits of an integrated approach from both a customer and an acquiring company's perspective. The commercial, client experience and enterprise value creation benefits of this approach are broad and noteworthy. 

In chapter two, I will delve into the array of benefits of Buy & Integrate from an employee perspective, both on the acquirer (buy-side) and acquired (sell-side). Needless to say, if an employee on the sell-side is an owner and/or material equity stakeholder in the business, there is very often a monetization component to the M&A transaction, which can range from nicely rewarding to “life-changing”.  

However, for most employees on the sell-side, a change of control transaction can come with a certain level of angst and concern, whether the suitor is a financial or strategic buyer.  There is always a level of unknown during such ownership changes, and transaction leaders should do their very best to confidentially communicate as much and as often as they can to quell this climate of mystery.   

In most cases, especially in people-based services organizations such as MSPs, the career and monetary opportunities for sell-side employees post-transaction can be quite significant. An integrated combination of MSP business models can create scale, brand affinity, upward mobility and new key innovation/industry learnings environments for many employees.

From the perspective of employees on the buy-side, the benefits can be equally exciting. Not only do the buying employees gain the scope and scale of their new colleagues being brought into the fold, but they also gain functional expansion, cultural diversity and a tremendous leadership opportunity.  

As a buyer, it always pays off to be both collegial and magnanimous, acknowledging and welcoming the new team to the company. Openly embracing new teammates creates a positive climate that is likely to lead to enhanced satisfaction and productivity. While cultural alignment and unification can be critically important for successful integration, embracing the inbound employees’ differences, values, and diversity can instil a sense of belonging for all. 

Putting the inevitable politics aside from an integrated organizational structure perspective and focusing on benefits and outcomes should be a guiding principle, especially for the buy-side team.  More often than not, the acquired sell-side employees bring a fresh perspective, specific methods, and processes to be leveraged for seamless value creation. Again, it benefits acquirers, such as Abacus Group, to keep an open mindset as part of post-merger integration concerning the acquired employees' talents, silks and best practices, seeking accretive adoption into the combined entity.

While successfully combining these people-centric MSP businesses can be fraught with complexity and risks, a proactive, thoughtful, people-first approach to post-merger integration is truly the key to delivering on the promise of significant M&A synergies.