“Never pursue an acquisition in which the employees are not better off as a result.” This is the philosophy Rollins lives by in its role as acquirer, says President and COO John Wilson. He points out that the transition period is pivotal to the success or failure of every transaction. “We’ve learned some valuable principles over many years that guide us in welcoming a new business to the Rollins family. We hold ourselves accountable to these principles.”
Rollins isn’t alone in evolving its approach to acquisitions. Rand Hollon of Preferred Business Brokers says that large companies across the industry have come to appreciate the value of talent in ways they simply didn’t 20, or even 10, years ago.
“Today when a company buys a business, the business leaders pay as much attention to the employee base as the customer base. They recognize that in addition to capturing and keeping the customers, they have the opportunity to increase the depth of their talent,” Hollon says. “They also realize that the employees hold the keys to the kingdom when it comes to customers.”John Myers, president and CEO of Rentokil North America, says that his team spends a lot of time planning talent integration prior to closing any deal. “Some sellers want to continue in their current role while others want to do something new in our organization. In either case, we consider this good news, as we are always looking for good people,” he says. “Other sellers will choose to retire or try something new outside of pest control after helping us for four to six months post-sale. We are very respectful of each seller’s decision and we customize our integration plans for each acquired company.”
Tim Pollard, senior executive vice president and COO of Atlanta-based Arrow Exterminators, believes that Arrow truly shines during the transition phase.
“We take an all-hands-on-deck approach, immediately managing the transition,” he says. Our president and CEO, COO, chief human resources officer and chief development officer are all on-site for the first few days to set the tone; we want the new team members to see the value we place on their business and their employment. Our senior VP and region VP of operations stay on site for several weeks, and our acquisition integration specialist stays for months to ensure a smooth transition.”Perhaps even more important than all of this is how Arrow management communicates with the acquired company’s team. “We tell team members, ‘We know you’re probably worried, but you have a position with us. Now it’s yours to keep,’” Pollard says. “We generally don’t interview team members to see where to place them; we expect them to stay in the role they had before the acquisition, as long as they live up to our performance and screening standards. In many cases, we’re going into new markets. We need everyone there. But even more importantly, we don’t think that letting people go is the right thing to do.”
Myers expresses a similar sentiment: “On the day of closing, we retain all colleagues and meet with them on day 1 to introduce ourselves and answer their questions. We explain that we will honor their tenure, and we walk them through our benefits package, which, in almost all cases, is better than what they currently have. We also talk about the great career opportunities that our larger business can provide them. We ask the new colleagues to keep doing exactly what they have been doing, as it is these activities that have made their company so attractive to us in the first place.”
Wilson shares just how important it is to Rollins to embrace the new acquisition-related talent. “I could cite a number of examples of companies that Rollins did not pursue because certain characteristics of the deal would have required us to cut key people,” he shares. “We’re just unwilling to operate that way.” — Donna DeFranco