The first step in most medical practice or health facility sale discussions (including those with private equity) is the negotiation and execution of a Non-Disclosure Agreement, also commonly referred to as an NDA or Confidentiality Agreement. An NDA is one of the more “boilerplate” documents in any transaction, but it should be carefully considered, as it can sometimes omit important concepts or overreach in its scope, write attorneys with Krieg DeVault in Lexology.
An NDA controls how the parties will treat the information they obtain from each other, more typically information the practice will provide to others. A broker or private equity buyer is not likely sharing much, if any, sensitive information, so the NDA may practically only cover the information coming from the practice even if it is designed to be mutual and apply to both parties. Confidential information is likely to include payor contracts, employee information such as wages (including physician compensation arrangements), pending litigation, compliance concerns, 3 to 5 years of historical financial statements, etc. Read more.
