Case Study Background

Often companies undergo a change in ownership, or reorganization which impacts the careers of the employees. The change is usually motivated by the need to position the company to better serve the market or address new controlling ownership.

In this hypothetical case, a friendly acquisition is made by a national financial services company of a highly successful sole proprietorship Firm.

Background – Seller Firm

Over the past 35 years Mr. Seller has developed his specialty financial advisory and investment management company selling to and managing portfolios of financial investments mainly for high net worth clients from the mid-west. His leased office is in Chicago serving four market segments: agriculture, forestry and wood products, mining, and energy. The sales force works from home offices.

Mr. Seller has four grown daughters. Each completed college, got married and are raising a family. Despite having the opportunity to intern during summers, none has any interest in joining the Firm.

Mr. Seller has eight long term managers (all VP level). They work in pairs doing financial analysis and retail sales for one of the four market segments. These are the most valued employees the acquiring Firm wants to keep.

In addition to the 8 VPs there is an IT manager and operations manage and 4 support staff. The legal advisor and accounting Firm work on a contract basis when required.

The Seller Firm has its own IT systems (developed by Seller Firm over the years). The IT manager is near retirement and the Seller IT systems are old.

The Seller Firm is challenged to keep up with the increasing amount of Federal regulations, and they have outgrown their office space. No further expansion is reasonable to solve either challenge.

Background – Acquiring Firm

A nationally known retail financial services Firm wants to make the acquisition of the Seller Firm because of the extraordinary sales to employee ratio. The Seller Firm’s existing client base, investment accounts and specialty knowledge is extraordinary. Making this acquisition profitable in the long term.

The Acquiring Firm plans to continue operations from the Seller Firm’s current office for up to 12 months as the transition of the operations, human resources, IT, legal, accounting functions can be integrated into the acquiring Firm. At that point the acquiring Firm will offer positions to the Seller Firm employees based on need. Except for the 8 VPs there is no contractual obligation to retain any other employees.

Question: What is the organizational change for Mr Seller, and how can his stress be reduced?