deal-structures
A non-disclosure agreement is a contract that defines confidential information, permitted use, representatives, duration and remedies. In M&A it is the legal basis for sharing a CIM, a data room and management presentations.
A well-drafted non-disclosure agreement does five jobs: it defines what is confidential (and what is not — public information, independently developed information, compelled disclosure), it limits use to evaluating the transaction, it names who may see the file (directors, employees, lenders, advisors), it sets a term, and it sets remedies. Standstill clauses appear when the target is listed or when a buyer could otherwise build a stake.
The NDA page covers how the abbreviation is used as a process gate. This page is the instrument.
The NDA usually survives alongside the letter of intent. Some LOIs restate confidentiality; others incorporate the NDA by reference. The definitive SPA will have its own confidentiality regime after signing, which is a different problem: now both sides hold the other’s integration secrets.
A fund’s form NDA allows disclosure to “financing sources.” The seller’s form requires named sources only. They spend four days on that sentence because the buyer wants to shop the deal to unitranche lenders before exclusivity expires. The commercial issue is process control; the legal issue is the representatives clause.
Sellers want a narrow purpose, a long term, and a non-solicit of staff and customers. Buyers want residuals (the right to use residual memory), a short term, and freedom to talk to financing sources. Strategic buyers additionally care about reverse due diligence leaks.
Undefined “affiliates.” No process for legally compelled disclosure. Forgetting return-or-destroy at the end of a failed process — then discovering the CIM in a later deal file. Using an employment NDA template for an M&A process.
Damages for breach are hard to prove. Injunctions are the practical remedy and they are slow. An NDA will not make a weak business confidential in the market.
Confidentiality is necessary and insufficient. The scarce resource is not the PDF lock; it is a single structured dataset that authorised counterparties can analyse without spawning uncontrolled copies.