When you embark on your M&A journey, you’re bound to hear the word confidentiality thrown around, but why does it matter so much? Every merger and acquisition transaction involves sensitive information, which translates into high stakes throughout the deal. If this private data were to leak, it could have negative repercussions on your business’s current-day operations, its future sale, and more. Confidentiality is absolutely non-negotiable.
An M&A transaction is likely to be the largest exchange of sensitive data that you make in your entire life. You aren’t just selling your business, you’re selling your financial data, customer information, intellectual property, and more. Letting this information out before it is intended could jeopardize your business’s current market share or even impact your overall business valuation. Maintaining confidentiality is the only way to ensure competitors cannot impede on your transaction strategy.
Maintaining confidentiality isn’t just preferred; it’s often mandatory. Depending on your location, local regulatory authorities have their own set of rules and regulations regarding confidentiality. This is especially common for publicly traded companies. It is integral to research local, state, and federal laws to avoid potential penalties.
Publicly announcing the sale of your company must be done at the right time. Disclosing the sale before the opportune time could result in market volatility pre-sale. This volatility could result in a lowered business valuation, higher acquisition costs, and even the loss of employees due to fear of instability. Maintaining confidentiality doesn’t eliminate these risks, but it’s the only protection your business has against them.
It’s critical to protect your confidentiality during your M&A journey to secure the best outcome for you and your business. Stony Hill Advisors is here to worry about protecting your confidentiality, so you don’t have to. Connect with an experienced M&A advisor today to discuss your options. Let’s work together.