Smooth processes and confidentiality through NDA
The non-disclosure agreement (or NDA) is the starting point for any serious dispute between the seller and buyer in the context of a sales project. However, NDAs regularly cause process disruptions and even deal break-offs right from the start, as both sides cannot agree on the NDA. A certain market standard that balances the interests of buyer, seller and advisor has been established over the last few years. In this guide, we point out the do's and don'ts for a smooth start to the process.
Typically, sales consultants approach selected potential buyers on the basis of an anonymous short profile (or teaser) in order to arouse interest in a possible transaction. If the buyer is interested in examining the investment opportunity in more detail, it is necessary to sign a confidentiality agreement first. This is important because in the course of a sales process, the seller must disclose a great deal of confidential information that may only be used by potential buyers, especially competitors, for the purpose of making a decision regarding the transaction.
The NDA for small and mid cap transactions should be short and concise and avoid clauses that are not acceptable to one of the parties. A balanced NDA proposal that can be accepted by the buy-side without negotiation will save time for all parties and promote momentum without creating negative sentiment.
Together with our partner CMS, we would like to support you with this guide and the best practice templates for a smooth NDA exchange.
Included for you:
- Detailed guide to dos and don'ts
- Best Practice Templates / Templates some text
- NDA short version (German)
- NDA long version (German)
- NDA short version (English)
- NDA long version (English)
7 do's and don'ts for smooth processes thanks to a fair NDA:
- Length & Language
- Disclosure of information to third parties
- Contractual penalty
- Return of documents
- Burden of proof
- Employee solicitation and contact ban
- Runtime
Read the DealCircle BestPractice NDA Guide here and get several additional NDA templates.
And if you are interested in seeing exciting M&A deals on an ongoing basis, register for free : HERE
