M&A And Transaction Readiness: Where People Risk Becomes Financial Risk
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Key insights

  • In Data Center's M&A environments, people risk directly impacts valuation, integration success and revenue realization, making leadership continuity and workforce stability critical financial variables, not just HR concerns.
  • Successful organizations treat workforce strategy as part of transaction readiness, securing talent early, strengthening leadership continuity and planning integration with a clear cultural and operational roadmap.
  • Retention is shifting from reactive hiring to a more strategic, experience-led approach, where total rewards, career development and day-to-day leadership all play a central role in sustaining performance and growth.
Black IT Technician with a Laptop Computer Gives a Tour to a Young Intern. They Talk in Data Center while Walking Next to Server Racks. Running Diagnostics or Doing Maintenance Work.

Data center M&A activity reached over $69 billion in 2025, reflecting strong investor appetite for digital infrastructure assets.1 However, as valuation multiples rise, scrutiny of execution risk is increasing, placing people risk at the center of that assessment.

Leadership continuity has a measurable impact on outcomes. Organizations that retain experienced construction and operational leaders deliver consistent results, maintain stronger stakeholder relationships and avoid costly disruptions.

This is evident during post-merger integration. "Without a clear cultural integration plan, turnover in critical areas can delay the revenue," explains Russell Paape, area vice president at Gallagher. "There's no one-size-fits-all solution, but a clear plan must be in place before acquisition closes. This plan should define timelines for full integration and how the transition will be managed."

Gaps in leadership or workforce stability can create integration challenges, delay timelines and erode value. For example, in acquisitions aimed at entering new verticals, employee attrition can result in the loss of critical talent needed to deliver on that strategy. This can delay the realization of anticipated revenue and weaken the expected value of the deal.

At the same time, people-related costs, particularly benefits, represent a significant and often underestimated component of deal value. "Benefit programs can exceed $20,000 per employee per year, making effective cost management a source of immediate value in an acquisition," adds Paape.

As a result, sophisticated investors are beginning to evaluate not only the physical and financial attributes of assets, but also the underlying workforce: its stability, capabilities and readiness to scale.

Building a resilient people strategy

To compete in today's environment, organizations must move beyond reactive hiring and adopt a more strategic approach to workforce management.

Role of an integrated approach

The data center sector is on a trajectory to outpace the available talent pool. What was once an HR challenge is now a defining strategic question: how organizations will scale their workforce, manage rising people costs and maintain continuity as they grow and transact.

People risk cannot be addressed in isolation. It sits at the intersection of workforce strategy, operational execution, financial performance and risk management. Addressing it effectively requires a coordinated, cross-disciplinary approach that integrates workforce planning, total rewards, organizational design and transaction readiness.

“Having foresight to think ahead is critical. It ensures that you’re making proper investments in talent, training and operational scalability today, rather than reacting to needs as they arise,” explains Haseman.

This shift is already underway. Organizations are moving beyond reactive hiring to position people strategy as a core driver of performance and value creation. Those that succeed will remove operational bottlenecks and take a forward-looking approach to talent.

Partnering with advisors who can bring an integrated view across risk, workforce and transaction strategy can help organizations align their people strategy with their growth ambitions and navigate the complexities.

In an industry defined by speed and scale, the ability to anticipate and manage people risk will determine which organizations can sustain growth.

Gallagher helps investors and operators assess and manage people-related risks during transactions, ensuring leadership continuity, smoother integration and better protection of deal value.

Sources

1Eddy, Nathan. "Data Center M&A Outlook Robust in 2026 Despite Power, AI Risks," Data Center Knowledge, 12 Feb 2026.