What is a Clean Team?
A "clean team" (sometimes called a "firewall team" or "Chinese wall team") is a group of individuals authorized to receive and analyze highly sensitive competitive information during M&A due diligence. Clean team members are separated from the buyer's regular operating personnel by information barriers designed to prevent competitively sensitive information from flowing to individuals who could use it for competitive purposes.
Clean teams are essential when a potential buyer competes directly with the target company. Without proper safeguards, standard due diligence could become a vehicle for competitive intelligence gathering - even if the transaction never closes.
Clean team provisions also address antitrust concerns. Premature exchange of competitively sensitive information between competitors - such as pricing, customer terms, or capacity plans - can constitute illegal coordination even absent a completed merger. Proper clean team structures help demonstrate compliance with antitrust laws during the regulatory review period.
Clean Team Structure
The fundamental architecture of a clean team arrangement involves separating personnel into distinct categories with different access rights and corresponding restrictions:
Clean Team Members
- Outside legal counsel
- Outside accountants
- Investment bankers
- Designated internal M&A staff
- Senior executives (limited)
Categories of Information Access
Clean team provisions typically create multiple tiers of information, each with different access rules:
| Information Category | Examples | Who Can Access |
|---|---|---|
| Tier 1: Highly Competitive | Customer-specific pricing, bid strategies, capacity expansion plans | Outside Advisors Only |
| Tier 2: Competitively Sensitive | General pricing methodologies, customer lists, product roadmaps | Clean Team |
| Tier 3: Business Sensitive | Financial statements, operational metrics, employee data | Clean Team |
| Tier 4: General Business | Corporate structure, material contracts (redacted), facilities | Extended Deal Team |
| Aggregated/Sanitized Reports | High-level summaries prepared by clean team without customer details | Senior Decision Makers |
Clean Team Member Requirements
Eligibility Criteria
To serve on a clean team, individuals typically must:
- Not have day-to-day responsibilities in competitive operations (sales, pricing, product development)
- Be willing to sign individual confidentiality acknowledgments
- Agree to information barrier protocols and restrictions on communications
- Remain on the clean team until the transaction closes or terminates (no moving between teams)
- Participate in antitrust training regarding information exchange requirements
Clean Team Lead
Usually outside counsel. Responsible for enforcing protocols, approving information releases, and maintaining barrier integrity.
Information Gatekeeper
Reviews all seller responses before distribution. Redacts customer names or sensitive details for extended team consumption.
Technical Expert
May access source code or technical specifications but cannot share competitive intelligence with R&D teams.
Financial Analyst
Analyzes detailed financials and customer profitability. Prepares aggregated models for decision-makers without customer specifics.
Information Barrier Protocols
Effective clean team provisions establish specific protocols for maintaining information barriers:
Physical Separation
- Dedicated workspace for clean team activities (separate from operating offices)
- Locked filing and document storage accessible only to clean team
- Separate IT systems or encrypted folders inaccessible to operating personnel
- Clean room facilities for highly sensitive document review
Communication Restrictions
- Clean team members may not discuss specific competitive information with operating personnel
- Emails containing sensitive information must be restricted to clean team distribution lists
- Meeting notes and presentations must be marked as "Clean Team Confidential"
- Questions from operating personnel must be routed through clean team lead
Watch for inadvertent information leaks: casual hallway conversations, forwarded email threads, shared calendar entries, or inclusion of operating personnel in meeting invites. Even well-intentioned "FYI" sharing can breach the clean team wall.
Reporting to Decision-Makers
Senior executives who must approve the transaction need enough information to make informed decisions, but they cannot receive the full competitive detail. Clean team provisions address this through:
Aggregated Reporting
Clean team members prepare summary reports that strip out competitively sensitive specifics while conveying material business insights:
- Revenue by segment rather than by named customer
- Average pricing ranges rather than customer-specific rates
- Market share descriptions rather than specific competitive positioning
- Technology capabilities rather than detailed product roadmaps
Q&A Process
When decision-makers have questions, a formal process routes inquiries through the clean team:
- Decision-maker submits question to clean team lead
- Clean team determines what information can be disclosed
- Response is prepared in aggregated or sanitized form
- If the question cannot be answered without competitive details, the decision-maker is informed that such information exists but cannot be shared pre-close
Sample Clean Team Provision
Clean Team. Competitively Sensitive Information shall be disclosed only to members of a "Clean Team" consisting of: (a) outside legal counsel to Potential Buyer; (b) Potential Buyer's outside accountants and financial advisors; and (c) the individuals specifically identified on Schedule A hereto who have executed individual confidentiality acknowledgments. Clean Team members shall not disclose Competitively Sensitive Information to any other Potential Buyer personnel except in aggregated, anonymized form that does not reveal customer identities, specific pricing, or detailed competitive strategies.
Antitrust and Regulatory Considerations
Clean team provisions serve both contractual and regulatory purposes. In deals requiring antitrust approval, regulators will scrutinize information exchange between competitors:
Document all clean team procedures in writing before due diligence begins. Maintain logs of who accessed what information. Have antitrust counsel review information request lists before submission. Avoid exchanging information about future pricing or competitive strategies that extends beyond what is necessary for valuation and integration planning.
Hart-Scott-Rodino Considerations
For transactions requiring HSR filing, parties should be prepared to demonstrate to the FTC or DOJ that clean team procedures prevented inappropriate information exchange. Common documentation includes:
- Written clean team protocols and procedures
- List of all clean team members with their roles
- Data room access logs showing who viewed which documents
- Certifications from clean team lead regarding compliance
- Training materials provided to clean team members
Post-Transaction Handling
If Transaction Closes
Upon closing, the information barrier typically dissolves. However, consider:
- Transition planning for integration of sensitive information
- Retention of clean team documentation for regulatory record-keeping
- Communication to former operating personnel about available information
If Transaction Terminates
If the deal fails, clean team provisions become critical protective measures:
- All Competitively Sensitive Information must be returned or destroyed
- Clean team members must certify non-retention and non-disclosure
- Information barriers must remain in place for specified period (often 12-24 months)
- Enhanced restrictions may apply to clean team members regarding competitive activities
For complementary protections, see our guides on Data Room Access Controls and Standstill Provisions that work alongside clean team structures.