Confidentiality in the sale of a business
Premature disclosure can damage the very business being sold. The practices below describe how we control the flow of information from the first conversation through closing.
Why confidentiality matters
A business depends on the continued confidence of its employees, customers, suppliers and lenders. News of a pending sale can unsettle each of those relationships at precisely the time buyers are scrutinizing performance, and the damage does not reverse if the transaction fails to close.
A controlled process is the most reliable protection. We follow the same practices on every engagement, and they serve buyers as well as sellers, since both have an interest in preserving the value of the business until closing.
The same discretion applies when we advise an acquirer. A buyer’s criteria, targets, offers and lender discussions are not shared outside the engagement.
Who is affected by premature disclosure
How we maintain confidentiality
Both parties have an interest in preserving the value of the business through closing. These practices apply to every engagement.
- Blind marketing. Outreach materials limit identifying information. The location and other sensitive details are disguised, and the business is never advertised on public marketplaces or business-for-sale websites.
- Qualified buyers. Buyers are evaluated financially and operationally before they receive confidential information about your business.
- Confidentiality agreement first. Every buyer signs a confidentiality agreement before the company is identified, which prohibits disclosure of any information about the business or its sale.
- Buyer profile. Buyers also provide a summary of their experience and financial capacity, which tells you who you are dealing with and screens out parties that are not prepared to transact.
- Need to know. Only those with a direct role, typically your attorney and CPA, are informed of your plans.
- Staged information. Buyers receive the information appropriate to each stage, such as revenue and earnings history early in the process and customer detail later.
- Protected documents. Proprietary processes, tax returns, detailed financial statements and customer lists remain confidential until the appropriate stage.
- Sensitive information last. The most sensitive information is released late in diligence, and only when it is required to close.
- No contact with employees. Before closing, buyers communicate with you and with us, not with your employees. A premature conversation can cost the business a key person.
- A plan for key employees. Key employees are informed at the appropriate time, with a plan to retain them after the sale. Confidentiality, retention or employment agreements can support that plan.
Begin with a confidential conversation
Nothing you share with us is disclosed without your consent.