What does it take to ensure a smooth transition once the deal is done?
For a buyer, due diligence means making sure you are getting the asset you are paying for, notes McLaughlin. For the seller, it means having a good grasp on the details of your own business and how the synergies with your merger partner will work to make your brokerage more competitive and efficient—and then devising the best ways to transfer all that knowledge to both the new owners and your team.
“In reality,” says McLaughlin, “the principals, both buyer and seller, have been discussing transition plans in confidence for some 120 days or so before an announcement is made. They are eager and excited to convey the benefits of the merger to their people and to the public, and they have been collaborating throughout negotiations about how they will do that.”
In most cases, McLaughlin points out, the selling broker already has the trust of his people.
“You’ve worked hard for many years to earn their confidence,” he says. “This is a time to play that trust card, to underline your commitment to their success and your confidence that the merger is the best possible strategy for them and for taking the company to the next level.”
Hanks agrees. It’s easy to be enthusiastic when you are selling to a buyer your agents already know and respect, he explains.
“Allen Tate has been a known and admired brand in the Carolinas for many years,” says Hanks, “and the family-owned Hanna organization is highly esteemed industry-wide. From the outset, our people were honored to become part of this team—and as I was to remain at the helm, as were our management team, our basic operations were not materially changed.”
A sale that involves no major changes in management and/or basic operations makes the transition period fairly seamless, he adds.
As Cantrell points out, “One of the reasons we were attracted to United in the first place was the fact that nothing would change in our day-to-day,” he explains. “’You built a great enterprise,’ was what they told me. ‘Why would we want to change it?’ That was a critical factor for me, and one that made it easy for my agents and managers to get as excited as I was about this next tier in our company’s growth.”
WAV Group’s Slusser recommends creating a transition team, including a few key people from each company who can help guide the integration for at least the first 90 days.
Palmer understands the value of that.
The great lesson for him, he explains, was how important it is to have a strong management team behind you; a team that has been privy to your goals and strategies and is empowered to make decisions.
Shortly after the merger announcement, says Palmer, he was in a major car accident in another state, suffering severe head injuries that kept him away from the office for months.
“The transition period started without me,” he says, “and at a time when most of our agents were working remotely. I am forever grateful that my amazing management team was up to the task of making the decisions that needed to be made and overseeing every aspect of the integration with HomeSmart.”
It should have been tougher than it was, says Swope.
“There was, of course, a bit of a feeling-out process as we brought Kevin’s team onboard and as they migrated to the new systems,” he says. “But his management team was well-prepared. We were able to put our best efforts into making them feel a welcome part of the family and showing them, rather than telling them, how our combined resources would provide efficiencies and increased productivity.”
The bonus, adds Palmer, who knew his time with the new company had an end-by date, was that once he was able to resume his duties, he could use his remaining time to identify and mentor the best prospects for future leadership roles within the firm.