November 2019

Series for Business Owners

Confidentiality in the Digital Age

Most owners of medium sized businesses in Canada are now in their 50ís. Over half of them have indicated, within the next 5 years, they plan to sell their business to fund retirement, the majority to an outside third party.

Selling a business is a complex task. Many owners have never been through the process before. The stakes are big - their ability to comfortably retire by securing fair market value for the business they spent most of their working lives building.

Confidentiality in the Digital Age

One of the keys to an orderly divestiture process is managing confidentiality on an absolute need to know basis. This is more difficult to do with most of the documentation in the divestiture process from original information documents to supplements flowing by e-mail not just to potential buyers but their advisors. Sellers are well advised to take steps at the onset to protect the highly confidential information they are required to disclose about their business to facilitate the sale.

  1. Non-Disclosure Agreement
    Most owners have a general NDA on file but the one used for the sale of their business should be customized for that specific purpose. To be of use, an NDA needs to fully protect the business owner providing them with the sole right to recall the information at any time during the process.

  2. Be Selective on Potential Acquirers
    The more important question is determining which parties receive the NDA which then triggers the flow of at least some information at the start of the divestiture process. Quality of prospects takes precedent over quantity. Screening buyers based on their fit within the industry and financial means and resources is therefore an important step before contact is even made.

  3. Minimize the People Involved
    Once discussions continue both sellers and buyers will understandably involve their respective management groups and advisors. Risk in disclosure is reduced substantially if fewer people are involved. We manage our mandates on an absolute need to know basis which serves as a blanket of confidentiality.

Long gone are the days when information documents were sent out by confidential hard copy courier. The digital age has served to increase the importance of taking additional steps to protect business owners. As additional security we send out all information on phased fashion so the most confidential information is only disclosed to qualified buyers who are planning to submit an expression of interest/letter of intent.

Rincroft facilitates the divestiture of medium sized businesses. Our clients are companies which are well established and profitable. Since its inception, our company has completed the sale of more than 50 business across a wide range of industries. We also provide advisory services assisting owners in building sustainable value even if they have no immediate plans to sell.

Find out more at

Phone: 519-572-3093