What Is A Clean Team Agreement


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Clean teams can be used as a negotiating tool, even if regulatory and antitrust issues are not a major problem. We considered the use of the “Clean Team” approach as a means for parties considering a ATM transaction to conduct and advance discussions without the typical protection of a status quo agreement (i.e., an agreement whereby the offeror imposes as a precondition for obtaining confidential information on the purpose of not purchasing objective securities for a certain period of time (except in limited circumstances). There are many reasons why this approach may not be appropriate for a particular transaction. The objective may feel that disclosure, even if it is linked to a team of its own linked to an NOA, represents an unacceptable risk without a status quo agreement. In addition, the use of clean teams may not be feasible in a context where a full due diligence audit of business and objectives is required. However, if the bidder only wishes to validate certain important assumptions about the objective before accepting a transaction, the “Clean Team” approach may be an alternative to consider. Parties must consent to the disclosure of confidential information to isolated own teams, by destination, and to the terms of use of this information by own teams. The parties must also agree on what can be communicated to the bidder by the own teams so that the bidder can draw conclusions on its main assumptions/measures (for example. B green/yellow/red), while protecting the confidentiality of the information. If the parties use this method, they should also consider listing in the sales contract the effects that are intended to disclose confidential information to its own teams (for example. B if the disclosure of confidential information to the individual own team for the purposes of the agreement should be considered as a disclosure of this information to the bidder). In summary, the use of own teams in limited circumstances can be a means of unblocking the situation and allowing the parties to continue discussions on a potential transaction that could be in the interest of all parties.

As part of the operations of the M-A, the use of “clean rooms” (d.h. data spaces containing commercial information on a purpose available only to own teams) and “clean teams” (i.e. isolated working groups, often composed of external experts with access to clean rooms) to isolate commercially sensitive information about one or more potential bidders, sometimes helping to pave the way for a negotiated agreement. In general, the objective of allowing a potential bidder to access its confidential information is hesitant, without the bidder executing an NDA (in order to keep this information confidential) and does not accept a status quo agreement. Conversely, in some situations, a bidder cannot be prepared to be bound by a status quo agreement. In cases where talks cannot progress, mainly due to the inability of the parties to agree on the treatment and use of the target`s confidential information, but both parties believe it is in their best interest to continue to judge whether a transaction is possible, it may be interesting to consider the approach of a clean team to allow the parties to have limited discussions that could lead to an agreement.