PROTECTING PRIVATE INFORMATION
A confidentiality agreement typically is the first thing prospective buyers and sellers sign when they enter M&A deal talks. These legal documents may seem like a formality, but they provide the foundation for a transaction’s successful execution and shouldn’t be ignored.
A safe space. Confidentiality or nondisclosure agreements are designed to keep information that parties exchange during the due diligence and negotiations process private. Typically review processes involve documentation about research and development, product rollouts, hiring and expansion plans, and long term strategies.
NDA’s are legally binding agreements M&A participants use to enable candid and detailed discussions during deal negotiations. They’re particularly important for sellers who need to feel comfortable enough to disclose competitive information to a serious buyer, particularly when the buyer is a competitor.
Buyers and sellers frequently have different objectives and prerogatives when it comes to the NDA, so be prepared to compromise.