Confidentiality agreement (NDA)

A confidentiality agreement (NDA — Non-Disclosure Agreement) is a binding contract by which parties undertake not to disclose confidential information received in connection with a potential transaction. In M&A, it is executed before the release of the Information Memorandum and access to the data room. Key provisions include: definition of confidential information, permitted disclosures (professional advisors, financing banks), employee and customer non-approach obligations, data return/destruction requirements and remedies for breach (typically injunctive relief and damages). Duration is generally 24–36 months.

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Example: in the sale of a Swiss industrial group, Hectelion issues a mutual NDA to each of 12 approached potential buyers before releasing the detailed teaser. The NDA prohibits: disclosure to third parties, direct contact with target employees or customers, and use of information for purposes other than evaluating the transaction. Signed NDA is the prerequisite for any substantive communication about the target company.

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Hectelion drafts and manages NDAs in all sell-side and buy-side M&A mandates, balancing seller confidentiality protection with the buyer information access needed for informed offer submission.