For many business owners, the most important question when considering a sale is not 'how much will I get?' — it is 'what will happen to my people?' After years of working alongside loyal employees, the thought of a buyer coming in and eliminating jobs is often the single biggest barrier to moving forward with a sale. This guide explains how different types of buyers approach workforce continuity, and why CMBB's approach is different.
How Private Equity Typically Handles Employees
Private equity firms acquire businesses with the goal of maximising financial returns within a defined investment horizon. This often involves identifying cost reduction opportunities — and labour is typically the largest cost in any business. While not all PE acquisitions result in layoffs, the incentive structure of private equity creates pressure to reduce headcount, particularly in administrative, management, and support functions. Sellers who care about their employees should ask PE buyers directly about their workforce plans and request contractual protections.
How Strategic Buyers Handle Employees
Strategic buyers — competitors or adjacent businesses acquiring for growth — often have the most significant impact on workforces. When a competitor acquires your business, they typically already have many of the same functions in-house: accounting, HR, sales, marketing, and management. The rationale for the acquisition often includes eliminating these redundant functions, which translates directly into job losses. For sellers who have built a team over many years, this is a painful outcome.
The CMBB Approach to Workforce Continuity
CMBB's acquisition philosophy is built on the belief that a business's employees are its most valuable asset. When CMBB acquires a business, we commit to retaining the existing workforce and investing in their development. Our most recent acquisition — Turnstile Security Systems Inc. — achieved 100% staff retention post-acquisition. We believe that continuity of the workforce is not just ethically right — it is operationally essential. The knowledge, relationships, and expertise of a long-tenured team cannot be replicated by new hires.
Contractual Protections for Employees in a Business Sale
Sellers who want to protect their employees can negotiate contractual protections into the purchase agreement. These may include: a commitment to maintain existing employment terms for a defined period post-closing, a prohibition on mass layoffs for a specified number of months, and retention bonuses for key employees. CMBB is willing to include these protections in our purchase agreements — not because we are required to, but because they align with our operational philosophy. Leonardo Obodoeke, CMBB's founder, has stated publicly that workforce continuity is a non-negotiable principle in every acquisition.
If protecting your employees is a priority in your business sale, CMBB would welcome a confidential conversation about how we approach workforce continuity.
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