Confidentiality In The M&a Process
A confidentiality agreement is typically the first agreement entered into by the parties considering a potential merger or acquisition. While seemingly straightforward, the issue of confidentiality is often critical to the success or failure of the transaction. Both buyers and sellers have several key reasons to be concerned about confidentiality, including client/customer and employee reactions, market intelligence, and competitors.
2010 continues to show signs that merger and acquisition activity will increase, such as increased confidence in private and public sectors, companies with plenty with cash on hand, and improving economic indicators. As such, sellers in 2010 and 2011 can reasonably expect that they will encounter an M&A market with multiple targets looking to be acquired and an increased number of buyers looking to pay better multiples.