non-disclosure agreement NDA at the beginning of any due diligence process a PE fund and the target company execute a non-disclosure agreement NDA to exchange confidential information and agree to make confidential the fact that discussions relating to a transaction are ongoing an NDA places an obligation on both parties to refrain from sharing privileged information with external parties post signing this obligation does not apply to information that becomes publicly available through no fault of the parties while the NDA is enforce the NDA covers confidential information shared through the due diligence negotiation and closing processes and parts often continue to apply even if the business is not acquired.
Ndas can be structured to protect a one-way or a mutual flow of information for private Equity transactions. These Agreements are usually one way as the target does not generally need to access privileged information about the PE fund if the target is public then these documents can be longer and more complicated in order to protect Insider information from being abused.
He points of negotiation for an NDA included term which relates to how long it lasts for.
to whom it applies coverage of what is considered confidential exceptions to confidentiality and the inclusion of indemnities to define monetary remedies in the event of a breach most ndas are usually only two to six pages in length obligations established by an NDA may be replaced or Amplified by other confidentiality agreements subsequently made during the investment process most often. It's a target's advisor such as an investment bank, which will send a negotiate the NDA on behalf of the selling party.
From the PE firm's perspective Associates are usually expected to handle ndas.
With regards to commercial Clauses and only use a legal advisor for a final sanity check.
Most PE firms have guidelines as to what they can or cannot accept within an NDA and Associates are expected to refer to those as a first step.
