Confidentiality/Non-Disclosure Agreements in Private M&A Deals

Summary

In friendly M&A transactions, the parties typically exchange confidential information about their businesses prior to signing a definitive transaction agreement. The parties use the information for a variety of reasons, including identifying cost and revenue synergies, validating the purchase price, and integration planning. Before exchanging confidential information, the parties typically enter into confidentiality agreements (also known as non-disclosure agreements or NDAs) that prohibit the disclosure or misuse of the information they will exchange during the negotiation and diligence process. Both public and private M&A transactions may feature confidentiality agreements in the early stages of the deal. However, since there is less information about private companies that is readily available to prospective buyers, private M&A confidentiality agreements are more often signed at the very early stages of the transaction. By contrast, in a public company M&A deal, confidentiality ...