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Thinking Of Buying Or Selling An MSP? Here Are 6 Tips From Experts

Joseph F. Kovar

A lot of factors are involved in determining if and when an MSP should engage in a merger or acquisition deal. And now, at a time when the MSP M&A space is red-hot, it is more important than ever to understand a company’s value, its cultural fit, and how different buyers including private equity firms approach the deal, according to a panel of experienced MSP M&A professionals.

6. How To Tell Employees About The Sale  

Rose said she has always told her employees that eventually she would have an exit strategy.

“I bought a house in Hawaii about a year before I sold my company,” she said. ”Everybody thought that means, ‘Oh my God, she’s going to sell.’ And I had three weeks of panic in the office. I’m like, ‘No guys. I just picked up a new mortgage. I’m not selling.’”

It is important to tell employees that there will someday be an exit, Rose said.

“You can tell people that you have a horizon and that you really want to do what’s right for your people and find the right place because you know you want to move on to something else,” she said. ”No one’s going to hold that against you. And I don’t think it’s going to create any fear, uncertainty, or doubt. I think you’re just being honest with your team. I think the worst thing for me was withholding it from my team until a month before the transaction. It’s so hard because I was always so upfront with my employees. And that meant a lot, that trust.”

It is important to look employees in the eye and make sure they know they will still all have jobs and that they will be part of a larger organization that’s more mature and that has better processes and resources, Phinney said.

“It’s like everybody got a kind of promotion the day we were acquired,” he said. ”And we presented it as a celebration of something that we had accomplished together. But it was hard in the days leading up to the transaction, being so excited and so nervous and not being able to tell anyone. It was challenging for us.”

 

 
Joseph F. Kovar

Joseph F. Kovar is a senior editor and reporter for the storage and the non-tech-focused channel beats for CRN. He keeps readers abreast of the latest issues related to such areas as data life-cycle, business continuity and disaster recovery, and data centers, along with related services and software, while highlighting some of the key trends that impact the IT channel overall. He can be reached at jkovar@thechannelcompany.com.

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