Once a deal is done, it’s vital that both companies collaborate to ensure a smooth transition that sets everyone up for long-term success.
All acquirers are looking for a smooth transition, Raveis notes, so integration parameters need to be included in the terms from the beginning.
“We have a whole integration team—one person who is the quarterback—and we have a checklist of over 100 items that involves about 20 different people. It’s very important to have one person own the whole process,” he says “There are a lot of things that need to happen, and it’s all-hands on board for the first couple of weeks. You have to make sure each agent is being heard and is being taken care of.”
Companies that have similar business models tend to have an easier transition in an acquisition.
“Focusing on clients first, as an example, is a culture and a mindset that is important to ensure a seamless integration,” Adams says. “A considerate rollout is imperative. Taking the time to be sure that every detail has been addressed prior to the acquisition helps eliminate ‘churn’ and creates a ‘business as usual’ environment. Proper planning and communication are the hallmarks of a great merger.”
Communication and transparency, prior to closing any deal, are key for a smooth transition and long-term success.
For instance, at Howard Hanna, Hanna notes that the best practice is to create a transition team with representation from both sides—with appropriate non-disclosure agreements in place—to lay out expectations, a timeline and an execution plan.
“We strive to lay out an 18-month schedule that has approval from both sides on the initiatives to be introduced to the acquired company and proposed branding changes, as well as appropriate timelines, expectations and ownership of the task at hand,” he says.
Only then does the real work begin, as both parties need to collaborate to determine needs and potential snags to a seamless transition.
After heading up numerous successful mergers and acquisitions for John L. Scott Real Estate, McBride can name lessons gleaned from each one, but the biggest overall takeaway he has found is the need for successful collaboration and communication across all involved parties and internal departments.
“The announcement to the agents is critical and should be handled with care,” he says. “Prior to a general announcement and press release, the seller should bring in key agents, including influencers, to make the initial announcement. In this meeting, the owner should share their genuine reasons for the sale, articulate why this particular buyer was selected and assure agents that they will be in good hands. This needs to be sincere and heartfelt.”
One pain point in mergers or acquisitions can be bringing the new office(s) and agents into the fold of the company, technology-wise.
“To address this, our executive team works closely with the IT department to create a transition plan and custom website for our new agents and team members,” McBride says. “This plan includes layers of support, including IT team members working onsite in the new office to help new members of the John L. Scott family set up their email and other tech tools.”
Furthermore, to ensure long-term success, the company establishes time to check in on the transition at set intervals.
“During these times, we check in with office leadership and agents to see if there are any lingering issues or new challenges we should address,” McBride says. “This helps the newer members of the John L. Scott family feel heard, valued and not forgotten about.”
Any announcement at John L. Scott is approached as a celebration, with the agent as the audience and the leadership of the selling company at center stage.
“We use videos of the leaders and the sellers to share their genuine and sincere appreciation for the sales team,” McBride says. “The seller will support the buyer’s ability and desire to help their agents excel in their real estate career. We also take the time to showcase tools agents can use with clients in an after-announcement reception. It is essential for the leadership of the buyers and sellers to be active in meeting, greeting and engaging with all event attendees.”
When all is completed, ultimately, companies need a great team in place to help agents and staff feel welcome and make sure they feel like they’re getting the attention they need to learn all of the new systems that will be offered to them.
“You need really experienced people and excellent communicators so that the change that will inevitably come is understood by the agents and staff that are being absorbed,” Durkin says. “You have to give things time and allow people to express themselves and their concerns. Also, allow space for suggestions on how you might be able to do it better. Sometimes we acquire a company because they have a certain piece of tech or marketing platform that we might want to adopt, so make it a two-way street so people feel heard, seen and appreciated for the work they’ve done.”
Slusser suggests putting in a lot of work before the closing to have everything ready to go at the announcement, citing things such as business cards, signs, the website, marketing materials and client contact announcements.
“We always recommend having the first 60 – 90 days well scripted with the training dates and activities scheduled and given out at the announcement,” he says. “Many firms will embed key people into the acquired offices to help answer questions and smooth out any issues.”
Slusser recommends creating a transition team composed of a few key influencers from each company. This team should help guide the integration, meeting with management at least weekly. After about 90 days, if done well, integration should be near complete.
Golden agrees that the key to success is to have a plan and strategy in place well ahead of time to ensure all of the incoming agents and staff feel welcome and totally supported, and to implement that plan very carefully so the move is as seamless as possible for all involved.
“We have an entire team dedicated to helping brokerages transition, and it serves us well,” he says. “For example, when we acquired CENTURY 21 Elm in Park Ridge, Illinois, last year, we carefully planned out each step, with marketing and listings ready to go on the day of the announcement, as well as a transition team that was onsite to talk to the agents, ensuring they were comfortable and had everything they needed to succeed. We made sure the sellers were very involved and visible in the process, too.”
Ultimately, there is great potential for success—for both buyers and sellers—when mergers and acquisitions are approached in a thoughtful and thorough way. When mergers and acquisitions are collaborative and focused on the success of real estate agents, real estate consumers will be the ultimate beneficiaries.
