PE Deal Communications: A Strategic M&A Guide

Here’s a statistic that should give every PE professional pause: According to Harvard Business Review, between 70 and 80 percent of business acquisitions fail. But here’s what’s truly surprising – most deals don’t collapse because of financial incompatibility. They fail because of poor communication.

For those in PE deal communications, this shouldn’t be surprising. KPMG’s research reveals that companies prioritizing communications are 13% more likely to achieve successful deals than average, while those overly focused on financial and legal aspects actually underperform by 15%. In the middle-market space, where deals typically range from $50-300 million, communication isn’t just a soft skill – it’s a multi-million-dollar value driver.

Building Your Deal Narrative: Beyond the Numbers

I’ve seen both sides of having PR at the table from the earliest stages, and I can say from personal experience that the difference in results is considerable. Your deal messaging strategy needs to balance several critical elements:

First, strip away the complexity. We often see this issue with tech companies who tend to celebrate certain buzzwords repeatedly until they become mundane and irrelevant. An exercise we like to take is to review every single point and ask ourselves how we would explain it to a third-grader. Smart people take simple ideas and allow their imaginations to take hold.

Second, financial communication should be recognized as storytelling. This is an essential collaboration in my experience, and it can take some negotiation since PR and finance don’t always sit at the same table. The entire C-suite should support the PR and finance teams while they’re going through this process.

Third, for international M&A deals, ensure all stakeholders understand cultural nuances such as urgency, timelines, and relationship building. This may take some time out of the deal-making trenches, but it’s well worth understanding because these are the issues that can ultimately, slowly, and painfully lead to a deal breakdown.

Media Relations: The Make-or-Break Factor

I once had a CEO laugh when I asked if she had recently Google’d herself. After her laughter died down, I said, “Aren’t you curious how potential investors see you?” She got it then, and we reviewed her search results as part of the preparation process.

Here’s what I’ve learned about media relations in transaction PR:

Building Media Presence: Building media coverage takes time and strategy to do correctly; there are no shortcuts. A solid PE PR Strategy will improve trust through coverage that speaks a stakeholder’s language.

Spokesperson Development: I can’t underscore the importance of media training. Sure, some people are naturally better communicators, but that doesn’t mean they can’t benefit from media training. Everyone, myself included, can benefit from intensive media training. That’s because one of the most important aspects of comprehensive C-Suite media training is that it gives a company insight into what persons make the best spokespersons for each situation. Another often overlooked aspect of spokesperson development is developing a point of view; thought leadership elevates the leader and the company and enhances brand value.

Documentation and Preparedness: Documenting your company’s growth and history is important; if you haven’t documented milestones using press releases, then consider the content you can control right now. If your website doesn’t have an announcements section, if it doesn’t have a Crunchbase profile, and it doesn’t have any industry affiliations, then planning for a deal may take longer, as these are important assets for any merger or acquisition.

Every company – and executive – has a history, but not every corporate history has been documented. A company’s history is important to stakeholders, and any skeletons need to be identified and managed before they can impact deal value.

The Stakeholder Symphony: Orchestrating Multiple Voices

For PE firms, stakeholder communications require a sophisticated understanding that extends far beyond investor relations. I’ve seen numerous deals face unexpected headwinds not from financial disagreements, but from overlooking key stakeholder groups. While investors are critical, employees and customers often hold the keys to post-deal value creation.

Message Consistency Across Audiences

When structuring a deal’s core messaging, consistency should fall easily into place. Financial storytelling is most relevant for potential investors, banks, and analysts, but you must also consider how the merger impacts customers and employees. The story consistency needs to be values-based so it can be delivered across platforms in various relevant voices.

Beyond Investor Relations

PE stakeholder communications must address multiple audiences simultaneously:

Employees: They’re the operational backbone of your investment. Uncertainty breeds talent flight, and losing key personnel can quickly erode deal value. Having PR understand the nuances of the deal thesis will help keep communication and core values aligned throughout messaging, particularly when addressing employee concerns.
Customers: They’re the revenue engine of your portfolio companies. Customer churn during a transition can devastate projected returns. Please consider this a branding exercise where the values resonate with all stakeholders, unifying them together. This phase is essential because it will also guide initial stakeholders in evaluating potential deals.
Suppliers and Partners: Often overlooked, these relationships can impact working capital and operational efficiency. Core messaging should be simple and emotionally compelling. Details relevant to each stakeholder will be included more specifically in their communications, but alignment starts at the top.
Investors: Both limited partners and co-investors need clear visibility into how the deal advances their investment thesis. Building confidentiality structures and data points from the beginning will provide guidelines for internal and external spokespersons. Timing triggers and clear messaging enable communication confidence.

Building Trust Through Transparency

Volatility is a deal-killer. Be as candid and transparent as you can. Push the limits to extend the openness where reasonable. Every stakeholder needs to feel authentic values and transparent information flow. There are numerous ways to do this from a brand communication standpoint, but trust should be incorporated into all PE communication efforts, including stakeholder communication.

Orchestrating Multi-Stakeholder Communication

PE stakeholder communication is more than transaction PR; there are communication nuances that can add millions to your returns. Where do you stand with each of the stakeholder groups? These answers will largely dictate a communications (and maybe even deal) timeline. When it comes to dealmaking, trust matters, and trust takes time.

If there’s uncertainty about stakeholder reactions, we recommend conducting a listening campaign before finalizing your communication strategy. These perspectives should be incorporated into the entire communication process from ideation through deal announcement strategy. This proactive approach has repeatedly helped our PE clients identify and address potential obstacles before they impact deal value.

Deal Announcement Strategy and Timing

Deal announcement best practices are only one of the considerations of PE communications. For example, in the months leading up, one of the most important deciding strategies is whether a merger and acquisition need a proactive or reactive communications strategy. Do a complete audit of your goals to help you determine the best course of action for your situation, and consider media and analyst calendars when considering timing. Avoiding media attention may require as much strategy as a proactive strategy.

Crisis Preparedness: Protecting Deal Value

Many tech companies believe they’re relatively insulated from crisis, and yet, cyber security is a threat facing every single business. I once was talking with a marketing director of a boutique hotel who was so engrossed in their brand communication that he said, “What would I need crisis planning for? We’re a happy place?” He had no response to my question of what would happen if a celebrity died on site.

Crisis plans aren’t there for the situations in your control but for those outside your control. For PE firms, crisis preparedness takes on added complexity during deals:

Pre-Deal Crisis Planning

Conduct thorough communication audits of target companies
Identify potential vulnerabilities across all stakeholder groups
Develop scenario-specific response protocols
Create clear escalation procedures

During-Deal Crisis Management

Maintain confidentiality structures and data points
Establish rapid response teams with clear authorities
Keep stakeholder communications ready for various scenarios
Monitor traditional and social media consistently

Crisis Prevention Strategies

Crisis prevention strategies need to be implemented by department.

Brand Value and Trust Building

PE deal communications should always include a thorough audit of brand value. What creates it in the context of the deal thesis, and what are the potential threats? Clarity here will provide insights into the communication plan and even deal timing. This will also impact the possible partnerships and purchases in the year leading up to the merger or acquisition. For example, if the company wants to be seen as cutting edge, is this part of the acquisition plan, or are there cutting-edge partnerships and campaigns that should be taken first?

The Path Forward: A Communications-First Approach

The most successful PE firms are shifting from treating private equity communications as a deal component to viewing it as the framework that holds all other components together. In a world where stakeholder trust directly impacts valuations, this isn’t just good practice – it’s good business.

Remember, for middle-market M&A deals, effective communications can swing valuations by millions. That’s not a soft metric – it’s bottom-line value creation.

A final thought: Every deal is unique, and your communication strategy should reflect that uniqueness while following these proven principles of successful PE deal communications. For more PE communications planning ideas, download our special report: Private Equity Communications Planning Guide