NDA Moneyball: The Results of M&A NDA Negotiations Don’t Change

In the world of private market mergers and acquisitions, the Non-Disclosure Agreement (NDA) serves as the “opening act,” setting the stage for the process to follow. The common assumption is that NDA negotiations are a necessary evil and that the seller, as the author of the initial draft agreement, dictates the course of the negotiations.

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These assumptions are wrong.

In collaboration with the US office of top 10 global M&A leader, Eversheds Sutherland, and worldwide provider of tech-enabled legal solutions, Integreon, The Contract Network set out to conduct a “Moneyball” study of M&A NDAs. Using generative AI to anonymously analyze thousands of private M&A NDA deal points, we asked: Which clauses are most common in private market NDAs? Which ones get negotiated most often? And most importantly, how do the negotiations end?

The results were clear.

Any attempt to initiate an M&A NDA with terms outside of market norms is largely pointless. More importantly, most of the negotiation points are predictable, largely uncontroversial and thus also avoidable.

This insight offers a potential paradigm shift in the M&A NDA process, and sets the stage for a streamlined approach in NDA initiation that emphasizes speed through alignment with market standardss.

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“Our findings are not just academically intriguing. They support actionable changes in negotiation processes and demonstrate our ability to greatly increase both the efficiency and predictability of M&A agreement negotiations across the board.”

Jim Wagner, co-founder and chief executive officer of TCN

“Interacting with TCN and watching the AI synthesize a massive amount of data has been instructive and educational. But the real reward is how invaluable these insights can be to how we serve our clients going forward.”

Bob Pile, head of the US corporate practice and co-head of global corporate for Eversheds Sutherland.

“TCN has enabled us to both understand and enhance the dynamics of our deal negotiations in a manner that we believe will transform the efficiency of our interactions with the investor community, benefiting our sellers in the process.”

Brock Matthias, managing director at VRA Partners, a boutique investment bank serving the middle market M&A community.

“We are delighted to have played a pivotal role in this market study with TCN. More significantly, we are pleased to be able to deliver these market insights and superior outcomes as part of our managed NDA solution offering on TCN.”

Gabriel Buigas, executive vice president for contracts and compliance solutions at Integreon.

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