How Capital Alliance Addresses Confidentiality
We employ many field proven, overlapping methods to effectively maintain customer confidentiality. We recognize that confidentiality is vital to the interests of both Capital Alliance and the selling company. In over 30 years of interacting in the marketplace, we have refined a comprehensive approach to ensure the maximum amount of confidentiality during the sales process. The measures we put in place have proven to be highly effective.
Every good confidentiality program is closely monitored. We aggressively pursue even the smallest potential breach of confidentiality in order to minimize its impact and to ensure that our policies and programs remain the best in the industry. Throughout the last 10 years, our experience has been that confidentiality breaches are very rare on sales processes that we control and are almost always caused by uninformed or underinformed people who become involved in the process. Therefore, education and execution of proper procedures are an important part of our confidentiality program. Restricting participants to those with “need to know”, education and execution of proper procedures are important parts of our confidentiality program.
The following material outlines some of the aspects of the Capital Alliance Confidentiality Program:
The Capital Alliance Documentation Program
- Capital Alliance assigns each selling company a code number, e.g. SDE-3852, which is used in all communications in order to maintain confidentiality about the company's name. We avoid the use of the company's name in all interactions.
- The key selling shareholders approve all documentation that is prepared by Capital Alliance.
- Initially, we present only blind, generically written material to high level officers of prospective acquirers.
- We enclose the selling company's presentation material, The Acquisition Opportunity Report (also referred to as the confidential offer memorandum or briefing), in a plain blue cover.
- Capital Alliance uses security envelopes, shaded on the inside so that they must be opened to be read.
- The initial page of each Acquisition Opportunity Report is the confidentiality reminder statement.
- Capital Alliance professionals use well-established guidelines to ensure that the confidentiality standards are properly addressed in each sale process.
- Internal reviewers examine the documentation and execution of each process to ensure that people and methods continue to meet the confidentiality standards of Capital Alliance.
Contacts by Capital Alliance with Sellers
- Capital Alliance sends all mail to a seller's office marked “Personal and Confidential - To Be Opened Only By.”
- If desired, we will send all mail to a selling shareholder's home.
- We avoid high frequencies of mail and telephone communication at the seller's office.
- We do not leave detailed telephone messages with employees of a selling company. The most detailed message we leave is our personal name, our company name, and our telephone number.
- We will not send faxes to a selling company unless the selling principal verbally confirms that they are immediately available at the fax machine to monitor the receipt of the fax.
- Our fundamental approach is “one-on-one, pinpoint communications” between the responsible professional at Capital Alliance and the key selling shareholder. We avoid all communications with other employees of the selling company.
Contacts by Capital Alliance with Acquirer Prospects
- We contact only researched, selected acquirer prospects with written, blind, generic information about a selling company.
- We carefully review the overall approach to contacting specific acquirer prospects with the key selling shareholder; we often discuss and exclude sensitive parties, including customers, vendors, competitors, and others.
- We typically exclude acquirer prospects within a 100 mile radius of a selling company unless otherwise directed by the seller.
- The usual initial contact to acquirer prospects is through the presentation of blind, generic information using the company's code number. We initiate these contacts by mail or fax with a confidentiality agreement enclosed. Sometimes we call acquirer prospects and then send them a fax.
Overall Approaches When Contacting Acquirer Prospects
- Our normal experience is that, from the sample of screened acquirer prospects that are contacted in the blind, a relatively small percentage of these acquirer prospects will be given information disclosing the identity of the selling company. Therefore, few acquirer prospects become aware of the name of the selling company.
- We usually establish contacts at corporate headquarters, at the CEO level where important decisions are made and confidential matters are more frequently processed.
- We avoid interacting with the following parties, any others whose job description necessarily connects them with news-hungry outsiders:
- marketing departments of any company
- industry consultants
- industry trade organizations?
- brokers and intermediaries of any description?
- anyone who has previously demonstrated to us that they do not handle confidential matters correctly
Handling Specific Acquirer Interactions
- We remind acquirer prospects of the importance of confidentiality throughout the process.
- We request acquirer prospects in writing to direct all initial communications, particularly mail communications, through Capital Alliance.
- We coach acquirers verbally regarding confidentiality issues related to a specific program.
- We request acquirers in writing to limit distribution of written material and any other information about a selling company.
- If a confidentiality breach is detected, the offending individual is identified and directly confronted with the situation, including discussion of possible legal action.
Handling Meetings Between Sellers and Acquirers
- We usually coach acquirers to pose as visiting professionals while touring the selling company, such as consultants or financial services professionals.
- We stage visits to allow little or no communication with employees.
- We prohibit audits or reviews of files except during the final phase of the process, after the basic terms are agreed by both parties and final contract drafting is underway and proceeding smoothly.
- Capital Alliance professionals participate in very few plant tours so that employees of the selling company do not become suspicious of a common visitor.
- We sometimes conduct initial meetings at off-plant sites.
- We carefully select restaurants where confidential conversations may be conducted.
- Since acquirer prospects are well prepared with written material about a selling company before any meetings, initial meetings typically take a half-day or less.
- The Capital Alliance policy is to schedule no more than two meetings with a specific acquirer and a selling company unless price and terms negotiations have substantially progressed.
Internal Office Procedures at Capital Alliance
- During discussions in the offices of Capital Alliance, we describe selling companies generically, e.g. “the auto parts manufacturing company in the Midwest.” We avoid company names.
- We conceal identity information about selling companies around the office; company codes are used.
- When Capital Alliance professionals are out of the office, the administrative staff will not state where the Capital Alliance person is located unless an extreme emergency is verified.
- We avoid the use of a selling company's actual name during telephone and other discussions.