By Danish Lawyer Kiki Lara Bruun-Kiilerich, Bruun-Kiilerich Advokater ApS

Many M&A projects fail or are not a match made in heaven. One main reason for failure, is the failure to include considerations of the employees in the project.

Employees are by far the most valuable resource in your business. The goods you produce and/or sell, real estate, secret recipe for flagship products, production facilities, IPR, main brand, knowhow and other factors seem far more important, when calculating the price tag of your business.

But what about employees? How would the business perform without its employees, and what will the value of the business be, if key employees jump ship before, or after the take over?

In most businesses, employees are one of the most valuable resources, which is why it is so important to include HR considerations, early on in the process.

1. To be able to investigate and determine a company’s compatibility and possible integration with an already up and running operation, you will need to evaluate the strengths and weaknesses, of not only the company and its operations, but also its human resources, their qualifications and importance for the project to succeed.

2. During the due diligence process, it is important to investigate the company’s human resources, staff that the company will retain, integration cost issues, necessary reorganisations and workforce reductions, integration of individual and collective terms and conditions of employment, renunciation of collective bargaining agreements, retention rates, pension liabilities, severance packages, retention bonuses, identification, and retention of key employees etc.

3. Expert legal advisors in the field of HR are key players when it comes to identifying and defining necessary changes for the newly combined organisations and continuing workforce. For you to succeed in your company´s endeavours, you will need employment lawyers to perform HR due diligence, identifying main risks and costs associated with the M&A project, to identify red flags prior to the TUPE transfer, to provide mandatory employee communication and the valuable Q&A for your new and continuing workforce.

4. HR-legal advisors play an important role in ensuring best possible and legally compliant labour relations, change of management, workforce retention, building integrated reward programs, and to lead evaluation of employee communications, attitudes, at the engagement level of new and existing employees.

5. Employment and HR lawyers are also necessary in order to identify and solve transition issues, that may arise already during the due diligence process, in order to ensure a solid plan to navigate safely through an ocean of obstacles, when combining previous employment structures and organisations into one. Main obstacles include the culture of the workplace, different employment terms and conditions (e.g. salary, pension schemes, working hours, collective bargaining agreements etc.), expectations concerning productivity, working environments, alignment of HR departments, employee policies, personnel handbooks, ongoing change in management, workplace culture and employee communications etc.

As a Danish law firm Bruun-Kiilerich Advokater, BK-legal is experienced with all aspects of the HR-M&A process. We are happy to offer our legal services, in order for you to succeed in your M&A transaction, with particular focus on staff and employees from a legal perspective. The size of your M&A project is not important, our law firm is experienced in TUPE transfers of 1-1,500+ FTE.

We can help you from the beginning off the project, and our employment and HR law services includes establishing the bid pack and due diligence room, the due diligence process, contract negotiation and drafting, the actual TUPE transfer, handling employee communication, main HR documentation and the main transition and integration of the workforce.

Please feel free to contact us:

Bruun-Kiilerich Advokater,

www.bk-legal.dk,

Phone: +45 40 73 42 58,

E-mail: Kiki@bk-legal.dk

Bruun-Kiilerich selected list of experience within HR-M&A: 

• Acquisitions
• Outsourcing and in-sourcing
• TUPE transfers
• Due diligence
• Contract drafting, amendment, negotiation
• Employee retention, including key employees
• HR transition and reorganisation
• Non-disclosure agreements – NDA’s
• Individual and/or collective terms and conditions of employment, including how to implement collective agreements prior to TUPE-transfers, renunciation of an existing collective bargaining agreement (CBA) prior to the TUPE transfer.