Preserving Confidentiality During the M&A Process
If you’re wondering how to sell your small business, it’s likely that you’ll have completed some due diligence concerning mergers and acquisitions. During a merger or acquisition process, there will be a large amount of data shared and analyzed. This will increase the chances of confidential information being compromised or misappropriated. However, some processes help to preserve confidentiality throughout the M&A process.
Utilize Secure Technology
Sensitive data must be stored and shared in an appropriate manner. Therefore, it’s essential to have a data management solution in place before the start of an M&A. To make sure that you retain control over your data, look for data management solutions that offer multi-factor authentication, encryption, and certified data servers.
Present NDA’s and Buyer Qualifications
When you sell your business, you’ll have a document created to entice prospective buyers without disclosing too much information. After viewing this document, buyers that express an interest should then be qualified, and means tested to see if they can buy your business. Once qualified, potential buyers must sign a Non-Disclosure Agreement before the company name is revealed.
Barter Using Hold Lists
In the cutthroat world of commercial business, competitors can become harmful to a business if their name is leaked as being up for sale. A hold-list is of companies that you’ll contact towards the end of a sale process.
If the companies on your hold-list make some valuable offers, you can use these offers to tempt competitors into buying your business for higher rates.
Retain the Right People
During an M&A transaction, there will be a lot of information shared. It’s vital that this data is only shared with trusted associates and employees. There may be many professionals from different firms involved in an M&A; therefore, anyone allowed to view sensitive data must be vetted. Ask for recommendations from your professional network to find the right team for your M&A, and don’t be afraid to ask for endorsements and testimonials from the professionals that you choose to work with.
A successful exit plan strategy will involve a secure M&A that protects data while negotiating the most profitable sale of a business. For more information and assistance regarding strategic partnerships or business, sales call us on 866-565-9723 or click here today