Chapter 06
Confidentiality and staged disclosure
Confidentiality is not a document; it is a sequence. Information is released in stages, and each stage costs the candidate something before the next one opens.
The stages
- An anonymous description: sector, size band, structure, no names
- A non-disclosure agreement, signed by the party who can bind the buyer
- The memorandum, with suppliers and customers still masked
- A managed data room, opened per subject as questions arise
- Direct access to accounts and systems, usually only after signing
What an agreement actually does
A non-disclosure agreement rarely produces damages in practice, because proving loss from a leak is difficult. Its real function is to make the obligation explicit and to give the seller grounds to stop the process without argument.
The clauses worth checking are the ones about non-solicitation of staff and suppliers, the duration, and whether advisers of the buyer are bound as well.
Leaks
Most leaks are accidental: a candidate mentions the search to a supplier who also supplies the seller, or a job advertisement makes the timing obvious.
The response that works is a short, factual message to the people affected, sent by the owner, before the rumour has time to grow. Denial usually confirms what it tries to hide.
Staff
Telling the team early risks losing people; telling them late risks losing trust. In practice, the people who would have to answer buyer questions are informed once a deal is reasonably certain, under the same obligation of confidence, and the wider group at signing.
Whatever the timing, staff should hear it from the owner rather than from a candidate walking through the warehouse.
- How information is shared during a sale (https://www.businessforsale.eu/knowledge-base/sharing-information)
- Customer data and privacy obligations at transfer (https://www.businessforsale.eu/knowledge-base/customerbase-privacy-gdpr)