The Deal Communication Plan: Who Hears What, and When

A transaction communication plan sets out every audience, what each is told, by whom, through what channel and at what moment. The plan is written before anyone is told anything. The ordering is the plan: what makes it work is not the quality of the words but the sequence in which audiences hear, and the rule that nobody learns from outside first.

The word communication is doing more work here than it looks like it is doing. A communication is not the announcement. A communication is any moment at which somebody outside the small group working on a transaction comes to know that the transaction exists. A call to check whether a counterparty would consent is a communication. A question to a lender about appetite for new borrowing is a communication. So is a meeting room booked under a name that everybody in the building can read. Once the word is defined that way, the plan stops being a document about writing and becomes a document about sequence.

Take an everyday version first. A large household is arranging a wedding. The dates are close to settled and nothing is announced. There is an order in which people have to hear: the two people getting married, then the grandparents, then the aunts and uncles who will be asked to travel, then the neighbours, then everybody. Now imagine an uncle finds out from a neighbour who saw the hall booking. Nothing untrue was said to him, and no fact changed. The household now has to spend the first conversation explaining why he was not told, instead of asking him to come. The cost of a broken order is never the fact itself, it is that the first conversation gets spent on the order rather than on the news. A transaction works exactly the same way, with more audiences and a regulator watching one of them.

Harivansh Packaging Limited, an invented manufacturer listed on both Indian exchanges, is buying the whole of Sundarban Polymers Private Limited, an unlisted maker of flexible packaging films. Devyani Kulkarni is the chief financial officer of Harivansh Packaging Limited and Ashwin Rege leads the transaction team. The advisers on both sides are referred to only as the buyer's advisers and the seller's advisers.

What is a transaction communication plan, and when is it written?

A communication plan is a single document that lists every audience the transaction touches and, against each one, four things: what that audience is told, who tells them, when, and how it reaches them. The four fields are the whole of it. The plan has no legal force, is not filed anywhere, and nobody outside the working group ever sees it. The plan is an instrument of internal discipline, and its whole value comes from existing before the thing it governs.

The timing rule is blunt. The plan is written before the first conversation with anybody outside the working group. A first conversation is already a communication, and there is no way to take it back. On this transaction that moment sits at the very front of the sequence, at approach and confidentiality, well before there is any price, any term sheet or any certainty that a transaction will happen at all. Writing the plan that early feels premature, and the feeling of prematurity is exactly why it so often does not get written at all.

A plan written after the telling has started is not a plan, it is a record, and it will be reverse engineered to justify what has already happened. A backfilled plan is worse than no plan at all. A document that explains why each audience was told when it was told looks like governance and functions as an excuse. Nobody reading it later can tell the difference between an order that was chosen and an order that simply occurred. Where the telling has already started, the honest thing is to write down the position reached and fix the rest of the order, not to backfill a plan.

One constraint sits outside the transaction team's control and has to be picked up before anything else. Harivansh Packaging Limited is listed, so what it may say about a live transaction, to whom, and from what point, is set by the Securities and Exchange Board of India (SEBI) at sebi.gov.in, and what may not be done with unpublished informationInformation about a company that has not been made public yet. What may and may not be done with it is set by SEBI. about the transaction is set there too. The plan takes that boundary as given and builds the ordering inside it.

What has to be in every audience entry?

Four fields, and they are not interchangeable. The message is what that audience is actually told. The messengerThe named person who actually delivers a message to an audience, as distinct from whoever drafted the words. is the named person who tells them. The moment is the milestoneOne of the fixed points a transaction passes through, such as signing or completion, against which every other date is set. the telling is pegged to. Calendar dates move and milestones do not, so the plan pegs to a milestone and never to a date. The channelThe route a message travels: a filing, a letter, a meeting in a room, a call, or a note on a screen. is how it physically reaches them.

Watch which one goes missing. Almost every plan carries the message. Writing is the part that feels like the work. Most carry the moment. The sequence is what people argue about. Many carry the channel. The field that quietly disappears is the messenger, and a message with no named person delivering it is a message nobody is accountable for delivering. The gap does not fail loudly. The entry simply sits in the plan, correct in every word, and on the day nobody is quite sure whether Devyani Kulkarni was going to make that call or whether the transaction team was.

The messenger field also decides how the message lands. Deciding how a message lands is not administrative detail. The same sentence about a change of holder means one thing from the chief financial officer on a call and another thing from an unsigned note on a screen. Naming a person forces someone to think about whether that person is the right one, and it converts a plan from a description into an assignment.

What must Investor Communication carry, and what does every figure need beside it?

Harivansh Packaging Limited is listed, and its promoter and promoter group hold 58.0 per cent, so 42.0 per cent of it sits with everybody else. The holders of that 42.0 per cent are being asked to accept that a large amount of money has left the business and a large amount of new borrowing has arrived. The message to them has to carry five things: what is being bought, what is being paid, how it is funded, what it does to the borrowings, and what the buyer expects it to change.

Work the figures for this transaction, and run the bridge explicitly rather than quoting a single headline. The enterprise valueThe value put on the whole business before deducting what it owes, so it covers the lenders' claim and the shareholders' claim together. is Rs 1,320 crore, being 10.0 times Sundarban Polymers Private Limited's earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 132 crore. From that figure is deducted Sundarban Polymers' net debtBorrowings less the cash already sitting in the business, so it is the borrowing figure after that cash is set against it. of Rs 180 crore. The subtraction leaves an equity value of Rs 1,140 crore. Rs 1,140 crore is what the sellers actually receive, and quoting Rs 1,320 crore as the price paid is the single most common error made about transaction figures. The funding is Rs 140 crore of Harivansh Packaging Limited's own cash and Rs 1,000 crore of new borrowing at its own contracted rate of 9.0 per cent, and those two add to exactly the Rs 1,140 crore that goes out.

Now the discipline that bites hardest in an investor message: every figure carries the base it is struck on. A message that says the purchase was made at 10.0 times has not said anything until it says ten times what, for which period, and for which business. The full form is 10.0 times Sundarban Polymers Private Limited's EBITDA of Rs 132 crore. Strip the base away and the reader cannot check the arithmetic, cannot compare it with anything, and has been handed a number that behaves like a fact and is not one.

Leverage is where this stops being pedantry. There are two honest ways to report what the borrowing has done, and they are half a turn apart. On a consolidated basis, net debt of Rs 1,920 crore over combined EBITDA of Rs 609 crore is 3.15 times. On a standalone basis, Harivansh Packaging Limited's own net debt of Rs 1,740 crore over its own EBITDA of Rs 477 crore is 3.65 times. Both are true. Neither one is a figure until the message names which of the two it is. The same transaction reports as 3.15 times or 3.65 times depending only on the basis chosen. Opening leverage, before any of this, was 1.26 times.

There is also a third arrangement that is not honest at all, and it is easy to produce by accident: taking the buyer's own borrowing figure and dividing it by the combined earnings figure. The third pairing puts a standalone numerator over a consolidated denominator, describes no business that exists, and always understates the position. The third pairing should not appear in any message.

What must Employee Communication answer that the investor message never does?

The people inside both businesses are a different audience in kind, not in tone. The distinction between the two audiences gets missed more often than any other, and the fix that suggests itself is to take the investor message and make it warmer and simpler. Warming the investor message does not work, and it does not work for a reason that has nothing to do with writing quality. An investor wants to know what changes about the money, and an employee wants to know what changes about their own work, and a message written for the first does not answer the second at all.

Feel the difference with an ordinary example. A shop with four employees is sold to a bigger shop across the road. The person putting up the money wants to know the price, what the stock was worth and whether the rent is transferable. The four employees want to know one thing each, and it is the same thing: do I still come in on Monday, and to which counter. Every figure that matters enormously to the first party answers none of what the second party asked. Making the price message friendlier does not make it an answer.

So an employee message carries three things. The first is what changes for the employee, stated plainly, including the honest answer where nothing has been decided. The second is when more will be known, pegged to a milestone the person can actually observe. And the third is who to ask, meaning a named person rather than a mailbox. A named person is somebody a question can actually be put to, so naming one is what keeps a workforce from filling silence with guesses.

Now the honest gap on this transaction, and it is worth stating rather than papering over. Nothing has been settled about headcount, sites or role changes at either business. So the shape of the employee message can be stated in full, and the line about jobs cannot yet be written. Naming the absence teaches more than filling it. A made-up redundancy figure gets remembered and the structure gets forgotten. Where a real transaction has those facts, they go in that message. Where the facts do not exist yet, the message says so, and saying so is a real answer.

How is the communication plan for a transaction built, step by step?

How to plan Transaction Communications

Six steps, in this order. The order of the steps matters as much as the order of the audiences they produce. Step five cannot be done before step one, and step six is only possible once the fragile points in the order are visible.

Step one is a listing exercise and it should be done badly first and tightened afterwards. Everybody goes down, including the audiences that feel too small to matter. The audiences that get left off are rarely the important ones and are frequently the connected ones. Step two is where it emerges that the plan is not entirely the company's own: for several of these audiences the earliest moment they may be told is set by SEBI at sebi.gov.in rather than by anybody in the room, and the plan takes that edge as a given.

Step three is the one that gets shortcut under time pressure. Writing five messages from scratch takes longer than writing one and trimming it four times. The trimmed versions are always worse. Each one still carries the shape of the audience it was written for. Step four converts every line into somebody's job. Step five is where the ordering rule bites, and the ordering rule is set out below. Step six is the step everybody skips and the step that gets used. Plans fail at their weakest join, and the holding statement exists precisely for that moment.

How does this transaction settle its own order?

The audience list for the purchase of Sundarban Polymers Private Limited follows, and then the fact that fixes the order. The ordering fact is a property of this particular transaction rather than a general rule. A template supplies a list, and only the transaction itself supplies a sequence.

Now the fact. Two of those audiences hold a vetoA right to stop something. An audience holding one can prevent completion by withholding what it alone can give.. The consents from the two counterparties are conditions to completion, and they have to be sought during the conditions periodThe span between signing and completion during which the things the agreement made completion depend on are obtained.. On this transaction the conditions period ran nine weeks of the twenty two weeks from term sheet to completion. The nine weeks and the twenty two weeks are this transaction's own elapsed figures, and they say nothing about how long any transaction takes. The nine weeks do settle one thing: those two counterparties must be told before completion whether the plan wants them told then or not.

Follow that consequence outward. The consequence is where the ordering stops being a preference. Once those two counterparties know, everybody who deals with them is a route by which the news can travel. Both businesses already share customers, and those customers talk to the same counterparties. So the shared customers move up the order, not because anybody decided they were important, but because they became reachable. An audience holding a veto sets the timing for every audience connected to it, and connection is a fact about the transaction rather than a judgement about importance.

Why is the ordering rule absolute?

The rule is one sentence: nobody hears about their own future from a third party. The rule is stated as an absolute because the moment it is treated as a preference it stops functioning. A preference gets traded off against convenience, against a lawyer's availability, against whether a meeting can be booked. An absolute does not, and the reason it deserves that status is that the damage from breaking it is a different kind of damage from being slightly late.

Here is the practical consequence, and it is stronger than most people expect. For any two audiences on the list, call them A and B, a single question settles matters: could B learn this from A? If the answer is no, the order between them is free and can be arranged in any way at all. If the answer is yes, B has to be told before A or in the same minute as A. There is no third option, and no amount of goodwill closes the gap. The connection test constrains the order far more tightly than any judgement about who is important. Importance is an opinion and connection is a fact.

Running that test across every pair on the audience list settles most of the ordering. Two or three genuinely free choices usually remain, together with one hard constraint that was not visible at the start. On this transaction the hard constraint came from the two consents, and the free choices sat among audiences that have no contact with each other at all.

What does the plan hold ready for the day it goes wrong?

Every plan assumes the order holds. Orders break, and they break for ordinary reasons: a question from a journalist, an unusual movement in the share price, a supplier who guessed correctly, a photograph of a car park. The plan's last section exists for that morning, and it contains one thing.

A holding statementA short, pre-approved form of words a company can put out immediately when it is asked something it was not ready to answer. is a short form of words that can go out immediately when the company is asked something it was not ready to answer. A holding statement confirms nothing and denies nothing, and it does not need to. Its only job is to buy the hours in which the rest of the plan can be brought forward. The limits on what a listed company may and may not say when asked about a live transaction are set by SEBI at sebi.gov.in, and the statement is drafted to sit inside that boundary rather than to test it.

Three properties make one usable, and all three are about the day before, not the day itself. The statement is drafted in advance. The statement is approved in advance. And the statement is held by one named person who can release it without going to find anybody. Pre-approval is the property that cannot be added later. The moment the statement is needed is the moment nobody has time to approve anything, and an unapproved draft in a folder is not a holding statement, it is a document about a holding statement.

How does an analyst, a lender or an employee actually read the plan?

None of them ever sees the plan, and all three read its output. The gap between the plan and its output is worth holding on to. Internal discipline shows up externally whether or not anybody intended it to.

An analyst covering Harivansh Packaging Limited reads the investor message with a pen and goes straight to the bases. Ten times what, over which period. Which leverage pairing, consolidated at 3.15 times or standalone at 3.65 times. Whether the amount stated as paid is the Rs 1,140 crore of equity value or the Rs 1,320 crore of enterprise value. The two are different quantities, and only one of them left the company. A message that names its bases gets a shorter and less suspicious note written about it. A shorter note is a genuine practical return on a drafting habit.

A lender putting up the Rs 1,000 crore reads it for consistency against what it was told privately. Lenders sit inside the plan as an audience and outside it as readers of the public message, and a difference between the two versions is the thing they notice fastest. A household version of the same reflex: when a relative gives one figure for what a flat cost and gives the neighbours another, it is the first figure that stops being trusted rather than the second.

An employee reads for one thing, finds it or does not, and decides in about four seconds whether the message was written for them. Two tests give it away instantly: whether the message says anything about their own work, and whether it names a person they can ask. A workforce that cannot find a named person to ask does not stop asking, it starts asking each other, and that conversation has no source and no correction.