Nondisclosure agreements (NDAs) are the key that unlocks private equity deal sourcing. Without them, deal professionals and advisers have no way to dig into potential acquisitions to understand each business’s strengths and weaknesses, as well as their long-term potential or viability.
These agreements impact nearly every aspect of a private equity firm. Deal teams often see hundreds, if not thousands, of NDAs annually. With competition on the rise, turnaround time is more important than ever, and a slow NDA process could mean lost opportunities.
Finally, in-house counsel always have their eyes on these agreements as they restrict different parts of their organizations or create ongoing obligations that can lead to serious consequences if the firm violated any provisions, even unknowingly.