Non-Disclosure Agreement (NDA)
Definition - What does Non-Disclosure Agreement (NDA) mean?
A non-disclosure agreement (NDA) is also referred to as a confidentiality agreement. With reference to an M&A transaction, an NDA is usually executed by a prospective buyer prior to receiving a confidential information memorandum (CIM) 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.
Divestopedia explains Non-Disclosure Agreement (NDA)
A non-disclosure agreement executed by a potential buyer prior to receipt of a CIM 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 two years).
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Maintaining Confidentiality in Your M&A Deal - Are you concerned about information leaks when selling your business? This guide discusses what you need to do to maintain the highest level of confidentiality.
