Leaks happen – sometimes on purpose, but often by accident. When a health care business is involved in a transaction, a leak to the media can derail its communications plan or even the deal itself.
According to a 2018 study, 8 percent of worldwide mergers and acquisitions in 2017 that involved a publicly traded target were leaked before the public announcement of the transaction – including 8.5 percent of such deals in the U.S.
The study theorizes that some leaks may be intentional, intended to drive up takeover premiums or put pressure on one of the parties to accelerate the deal process toward closing.
The risks associated with leaks, of course, are significant. Unintentional leaks can attract early scrutiny from federal regulators, bring forward new bidders that muddle the deal process, or turn off investment banking partners, according to an analysis by CFO Magazine.
From a communications standpoint, leaks can put a company on its heels, forcing it to alter when and how it tells the story of a transaction to employees, partners, customers and the public. Just consider how your message and method of outreach to employees might change if your sale/merger/acquisition was suddenly all over the media.
With that in mind, here are a few tips to help health care companies prevent and prepare for information leaks about a pending transaction.
An Ounce of Prevention
• Map out your timeline carefully. If you have even a rough idea of when you want to announce your deal to external audiences, perhaps on the day you sign the definitive agreement, chart your actions backward from that date. For example, if you want to issue an external announcement at 1 p.m. on a Friday, consider when and how you will share the news with your internal teams. Too much lead time increases the chances of a leak and too little lead time could make it difficult to reach all parties before the announcement. Will you start Thursday evening? Friday morning? Who will you tell first, second, third – and how?
Next, consider the preceding days and weeks. Are there individuals or groups who will need to learn about the transaction in advance of your broader communications because they will have a role in ensuring the deal’s success? Who are they and when will they need to know?
• Keep the circle small. The fewer people who are aware of the deal, the fewer the opportunities for leaks. In the early stages, you might be able to keep the universe of people who are “in the know” small – perhaps a few executives and legal counsel on each side of the negotiating table. As planning progresses, work to control who learns about the transaction and when.
In Lovell’s extensive experience helping health care companies communicate transactions, many key players – including internal communications leaders – are not brought into circle until the last possible date (though before/just before any public announcement, if possible).
• Require NDAs. Although internal team members may have some form of nondisclosure agreement in their employment contracts, a separate NDA can help solidify the expectation of strict confidence; such agreements can be a good idea with board and medical staff leadership, as well. And obviously, NDAs can be particularly important with third-party partners.
Prepare for Leaks
• Ready a statement(s). Because leaks can happen despite the best prevention efforts, it’s critical to be prepared with a statement and/or talking points to use in response to inquiries from internal and external stakeholders. It’s important these messages are truthful (to avoid any damage to credibility if/when the transaction is announced) while not revealing too much.
• Start communications planning early. If news of your transaction leaks to the media, you’ll be in a much better position to respond if you’ve already invested significant time in identifying your key stakeholders, shaping your message and building your communications materials (internal memos, call scripts, external announcement, etc.). Depending on the situation and how prepared you are, you may be able to begin early execution of your communications plan as designed, or with tweaks to your messaging and timeline. Either way, it’s better than starting from scratch if the news breaks before you’re ready.
• Phone a friend. For health care executives focused on getting the deal done while maintaining daily operations, enlisting an outside expert to manage communications planning can be the best way to prepare while keeping the circle small. When brought in early, a partner like Lovell can help develop a comprehensive plan that maps out a communications strategy, messaging and timeline, while also planning for contingencies and helping respond to unforeseen challenges along the way.
Contact any of our senior leaders, or firstname.lastname@example.org, for more information or assistance communicating your next transaction.
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