A non-disclosure agreement (NDA) — also called a confidentiality agreement — is a legally binding contract by which one or both parties undertake not to disclose to third parties any confidential information received in connection with a potential transaction or business relationship. In M&A, the NDA is signed before the seller releases the Information Memorandum and grants access to the data room. It defines the scope of confidential information, permitted disclosures (to advisors, financing institutions), return/destruction obligations and remedies for breach — typically injunctive relief and damages.

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Example: in a structured sale process, Hectelion issues a mutual NDA to each of the 12 potential buyers before releasing the Information Memorandum. The NDA specifies: 24-month confidentiality period, permitted disclosure to professional advisors and financing banks, prohibition on approaching target management or employees directly, and an obligation to return or destroy all information if the process is terminated. Signing the NDA is a prerequisite for any further engagement.

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Hectelion drafts and manages NDA execution in every sell-side mandate, balancing seller information protection with the information access needed for buyers to make informed offers.