When acquiring a company, its employees run the risk of feeling "sold" and betrayed. To prevent this, ensure they hear the news from a trusted source with a clear rationale before the deal is finalized. This helps them understand the move and feel like part of the future, not just an asset being transferred.

American investors often underestimate the need for a physical management presence in Italy. Successful integration requires local leaders who can liaise with suppliers, customers, and authorities. Attempting to manage an Italian acquisition remotely from the US or another European hub is a common point of failure.

In Italy, the role of deal sourcing for mid-market companies has shifted from investment banks to law firms. Entrepreneurs now approach law firms first to explore a sale. These firms then discreetly connect them with potential buyers and advisors, acting as a less expensive, conflict-free starting point.

Unlike typical M&A, an ESOP asset sale requires all employee-shareholders to vote on the transaction weeks before it closes. This forces management to navigate employee emotions, uncertainty, and job security fears while still in the final, sensitive stages of diligence.

Due diligence cannot quantify a team's crucial soft skills. When an acquirer forces change aggressively post-close, they risk an exodus of these skills and key talent, maximizing the chance of the investment failing. A partnership approach that preserves talent for at least the first year is a much safer strategy.

For many Italian owner-founders, ensuring the well-being of their long-term employees is paramount, sometimes outweighing the highest bid. In one case, a seller presented three potential buyers to his employees and let them hold a referendum to choose the acquirer, ultimately accepting a lower offer based on their preference.

Italy's Golden Power framework allows the government to review and block transactions in strategic sectors, a separate process from antitrust. It has expanded post-COVID to include areas like AI and food production, requiring early navigation by foreign buyers as it even applies to intra-group restructurings.

Firing is legally challenging in Japan. To work around this, some large companies create a new department for a "new business vertical," transfer unwanted employees into it, and then shut down the entire function, effectively laying them off.

Andy Cohen recounts walking away from a deal post-LOI after the target tried to renegotiate terms to favor preferred shareholders over common employees. Even though F5's economics were unaffected and lawyers offered indemnification, the company refused to be associated with such practices, prioritizing ethical principles and reputation over closing the deal.