Situation overview:

A company going through a leadership transition was preparing to make a transformational acquisition that would take it into new markets with a first-time CEO at the helm. The acquisition was also not expected to produce profits in the first year, further positioning the company in an unfavorable light with investors. Management needed to implement a proactive strategy to minimize the potential negative impact of the acquisition announcement to the company’s valuation.

PROI member Role:

A  PROI Worldwide Americas Crisis Group partner designed and executed a comprehensive communications plan to manage investor relations and the company’s reputation leading up to the acquisition announcement. The strategy included:

• Developing an investor “briefing book” that provided greater transparency on the financial considerations of the deal and the long-term growth opportunities the new business would offer the company;
• Hosting an investor call and webcast prior to the acquisition announcement so management could proactively reinforce key messages and address anticipated investor concerns;
• Orchestrating a multi-city investor roadshow that allowed management to share key messages directly with its largest shareholders and sell-side analysts; and
• Expanding the investor audience through a series of one-on-one meetings with current institutional holders that had the capacity to take a bigger position in the company and with potential investors that previously demonstrated an interest in the company’s new target market.

Results:

The stock performed better than expected the day of the acquisition announcement, and the company’s management was satisfied with the outcome. In the weeks following the announcement, the stock valuation steadily recovered and ultimately surpassed the pre-announcement close.