What’s a Non-Disclosure Agreement?

A Non-Disclosure Agreement (NDA) is also referred to as a Confidentiality Agreement. With reference to a Mergers & Acquisitions transaction, an NDA is usually executed by a prospective buyer prior to receiving a Confidential Business Memorandum/Review (CBM) in a sale process. In a less common circumstance, an NDA can also be executed by a seller after the closing of an acquisition to ensure that the details of the transaction are not disclosed to the marketplace.

A non-disclosure agreement executed by a potential buyer prior to receipt of a CBM will commonly include the following provisions:

• A definition of confidential information;
• A requirement regarding holding the information confidential;
• Exceptions to confidentiality obligations including information that is already in the public domain;
• The limitations for using certain confidential information;
• The process to return the confidential information once the analysis has been completed; and
• Non-solicitation of employees (usually for a maximum period of 2 years).

For more information about a Non-Disclosure Agreement, click: Non-Disclosure Agreement.

The Summit Acquisitions Group — Business Brokers and M&A Advisors — specializes in the sale, appraisal, and financing of privately owned companies ranging in valuation from $500,000 to $5,000,000. Contact their offices in Atlanta, GA or Charlotte, NC for a free consultation.