How do you manage communication during a private equity exit?

Exactly. The key consumers of a private equity exit are typically investors and investees who may not understand investment legal and technical jargon. They, nevertheless, need to understand the intricacies transaction of an exit - after all, it's their money. The wording of all agreements and communication during the exit process must, therefore, be couched in simple language. Where technical terms are unavoidable, a schedule of definitions and explanations will come in handy.

As we go through a PE exit, we should make sure everyone's on the same page. It's important to share straightforward updates that fit each of their needs, reach out through different channels, and answer any questions one might have. It is important to keep communication open to make this process as clear and smooth as possible.

It's crucial in the PE exit journey to talk about timing. We want to keep everyone in the loop, but we also need to balance it with the need for confidentiality. Too early, and we risk uncertainties; too late, and it might feel like we're not keeping the audience in the loop. So, we've to sync our updates with the exit milestones, making sure we share enough without revealing the sensitive stuff too soon. It's a bit like finding the perfect rhythm to keep things smooth while everyone is on the same page.

Effective communication during a company sale hinges on identifying and empathizing with key stakeholders. Understand their perspectives and what they seek to gain. People generally want to know what a proposed transaction means for them and how it will potentially impact the relation they have with the ‘to be sold’ company. As such, it is key to customize your messaging to stakeholders incorporating your best understanding of their position. Empathizing with key stakeholders also helps you to identify key questions they might have which you can subsequently either include in your messaging or incorporate in a FAQ document.

It is tempting to ignore giving non-critical updates to stakeholders. However, these often pile up and, at times, what may begin as a minor hurdle may snowball into a major issue that eventually sinks the entire transaction. Hence it's important to ensure that all stakeholders are updated at every step and after every occurrence of the transaction and avoid unfortunate surprises.

Engaging stakeholders during a PE exit is like orchestrating a symphony – you're bringing together different voices, perspectives, and expertise to create a harmonious journey. Building trust, addressing concerns, and actively seeking feedback turns this process into a collaborative masterpiece. Regular updates and sincere acknowledgement of everyone's contributions ensure we're all in tune and moving toward a successful exit outcome.

Communication from transaction advisors (lawyers, M&A professionals, accountants, credit raters, media relations professionals, etc) should be channeled through one advisor to avoid diagonal communication and cross-talk. This one advisor is usually the lead transaction advisor - if there is none, the transaction advisors can nominate one of them to communicate with stakeholders.

Consider confidentiality, customization for stakeholders, crisis communication, feedback mechanisms, employee support, contingency plans, milestone celebrations, and post-exit communication for a comprehensive approach to managing communication during a PE exit. For example, implementing a dedicated support program, such as workshops or counselling services, to assist employees affected by the PE exit, providing resources and guidance to navigate the transition successfully and demonstrating a commitment to their well-being is key to a successful exit.