Public mergers and acquisitions (M&A) demand transparency under regulatory spotlights, while private companies tend to depend on confidentiality and speed. For example, 71% of public boards have taken action to deal with increasing shareholder activism, while private companies usually avoid such pressure.

These are the first differences that come to mind regarding public vs. private M&A. However, there are many more structural and procedural nuances that shape everything, from valuation methods to stakeholder alignment.

This makes tailored strategies non-negotiable for successful deal outcomes. This time, we dive deep into the differences in public and private M&A, focusing on the pitfalls and best practices for deal success.

Highlights:

• Public M&A demands transparency under regulatory scrutiny, facing prolonged timelines from SEC/FTC reviews and shareholder votes, while private deals prioritize confidentiality and speed through concentrated ownership.
• Public due diligence validates SEC filings; private deals require forensic audits to uncover hidden liabilities like unrecorded debt or founder biases.
• Virtual data rooms (VDRs) bridge gaps with AI redaction, role-based access, and compliance tools, balancing transparency and confidentiality.

What is public vs. private M&A?

• At its core, the distinction between public and private mergers and acquisitions depends on ownership structure and its cascading impact on deal mechanics. Public M&A involves companies listed on a stock market index (e.g., Nasdaq), where shares are traded publicly and ownership is dispersed among thousands of investors.
• Private M&A, in contrast, involves acquiring companies held by founders, private equity funds, or small investor groups. Such companies are not typically listed on stock exchanges (although taking public companies private has become an increasingly popular form of private M&A). This drives several distinctions between the two:

Visibility shapes strategy

Public companies operate under a microscope. Analysts, regulators, a company’s shareholders, and competitors analyze every filing a company submits, from 10-K reports to 8-K updates. Missteps, reputation-hurting disclosures, or controversial moves can lead to public backlash and shareholder lawsuits. That’s why public acquirers must be very cautious with their strategies.

What about private deals? Thriving in confidentiality, private dealmakers can audit sensitive data, such as pending lawsuits or family ownership conflicts, without public exposure that hurts the purchase price and financial performance.

Key differences between public and private M&A

Below, we dive deep into the key success drivers and differences between public and private deals:

Target company ownership

Public companies have diverse shareholders, including common individuals, company executives, other companies, and investment firms. For example, Google has billions of shares, while the float (tradeable on stock exchanges) ownership is split between ~66% institutional and ~30% retail investors. Because of this, public M&A moves often turn into a political campaign that must satisfy a diverse investor audience.

Private companies, conversely, have fewer shareholders. Ownership is often split between co-founders or management teams. With only approval from senior management required, this makes M&A negotiations much more streamlined. Concentrated ownership allows for faster consensus but risks “founder bias,” where personal relationships overshadow the target company’s valuation.

Deal process and timing

M&A transactions between publicly traded companies face significantly longer timelines, typically 6–18 months. This is due to regulatory reviews like the mandatory 30-day antitrust waiting periods (e.g., Hart-Scott-Rodino Act filings), protracted shareholder voting processes, and quarterly earnings cycles that force temporary freezes on deal activity.

In contrast, when a private company acquires another company, the timelines are often 3–9 months due to streamlined negotiations with target company voters, absence of public shareholder approvals, and limited regulatory oversight. For example, Thoma Bravo’s $6.9 billion take-private acquisition of SailPoint in 2022 was finalized in approximately three months.

Disclosure requirements

Public M&A mandates comprehensive SEC disclosures, not only its organizational structure but also its quarterly audited financial statements, executive pay, through filings like Form S-4. Private M&A has very few disclosure requirements and relies on contractual safeguards. Bespoke NDAs limit third-party access, redacted agreements obscure commercially sensitive terms, and staggered disclosures defer financial revelations until post-LOI stages.

Regulatory oversight

Public companies tend to face rigorous regulatory oversight, with antitrust agencies scrutinizing large transactions for market dominance risks. For example, deals valued over $10 billion take 27% longer to close than deals valued under $10 billion.

Dealmakers must also comply with stock exchange mandates requiring shareholder approval for significant equity issuances and navigate hostile takeover defense mechanisms like poison pills designed to deter hostile bids.

Private companies avoid these hurdles but impose stringent contractual safeguards. Private deals often structure payments around post-acquisition performance metrics, while indemnity clauses allocate liability for undisclosed risks uncovered after closing.

Due diligence scope

Strategic buyers in public transactions rely on standardized SEC disclosures, including annual financial statements (10-Ks), material event reports (8-Ks), and shareholder voting materials. This is to validate operational performance and governance risks through established industry benchmarks.

Private buyers conduct exhaustive reviews of internal documents (usually shared in secure data rooms), prioritizing forensic analysis. It uncovers several risks, such as hidden contractual obligations, founder control risks, and intellectual property encumbrances. 

Comparative summary: Public vs. private M&A

Aspect	Public M&A	Private M&A
Ownership Influence	Shareholder votes dictate outcomes	Founders/PE funds control negotiations
Timeline Drivers	SEC reviews, proxy fights, earnings cycles	Contractual terms, board alignment
Disclosure Risks	Competitors exploit public filings	Hidden liabilities emerge post-close
Regulatory Hurdles	Antitrust challenges	Contractual indemnities, earn-outs, and break-up fees
Diligence Focus	Validating 10-K/10-Q data	Forensic audits

Advantages and challenges of public M&A

Public M&A unlocks unique opportunities for scale and liquidity but demands navigation of a high-stakes regulatory and reputational arena. Below, we dissect its dual-edged nature through a dealmaker’s lens.

Strengths

• Regulatory transparency. Mandatory disclosures provide structured access to audited financial statements, litigation histories, and governance practices, enabling buyers to verify seller claims against standardized industry metrics.
• Capital efficiency. Stock-for-stock transactions, typically available to public dealmakers, allow acquirers to utilize equity as deal currency, preserving liquidity while aligning incentives with long-term performance.
• Publicly quoted price. It’s often easy to set the baseline for the purchase price due to a public company’s transparent market capitalization. Such ready-made valuations offer real-time benchmarks tied to sector trends, supporting pricing strategies that reflect current investor sentiment.

Pitfalls

• Regulatory delays. The FTC’s nearly two-year probe of Amazon’s iRobot acquisition exemplifies how antitrust scrutiny erodes strategic momentum.
• Shareholder activism. Activist interventions pressure acquirers to revise terms, adding layers of negotiation complexity.
• Market price volatility. Market reactions and media coverage magnify reputational risks, where adverse developments can destabilize valuations.

Advantages and challenges of private M&A

Private M&A offers a nimble path to growth, free from public market volatility. But it demands rigorous scrutiny to offset its opacity. Here’s how these deals balance agility against hidden risks.

Strengths

• Confidentiality protects sensitive data. Tight non-disclosure agreements (NDAs) shield critical negotiations, preventing leaks of sensitive operational metrics (e.g., declining customer bases) that could trigger bidding wars or destabilize valuations.
• Flexibility in deal structuring. Private transactions typically incorporate performance-based earn-outs, tying payments to post-acquisition milestones like customer retention rates or revenue targets, aligning buyer-seller incentives.
• Speed of execution. Private equity buyers often deploy standardized processes for due diligence and funding, minimizing procedural lag and requirements from regulators such as tax authorities.

Pitfalls

• Limited financial transparency. Post-acquisition audits frequently reveal hidden liabilities, such as unrecorded debt, pending litigation, or environmental contamination, which were not identified during due diligence. However, a private seller may be held financially responsible for undisclosed liabilities.
• More founder presence and complex negotiations. Transactions involving family-owned or founder-driven businesses often face delays due to deeply rooted personal dynamics between and conflicting priorities among financial sponsors. 

How virtual data rooms support both deal types

Virtual data rooms (VDRs) have become the backbone of modern M&A, bridging the gap between public transparency and private confidentiality. Below, we dissect how advanced VDR tools streamline due diligence, mitigate risks, and adapt to the unique demands of both deal types:

Granular access control

Traditional document sharing methods struggle to balance transparency needs with data security. Virtual data rooms (VDRs) resolve this through tiered document access permissions tailored to stakeholder roles. Here’s how structured visibility shapes public and private deals:

• Public deals. A publicly listed holding company can make regulators review antitrust materials through dynamic redaction tools that mask competitively sensitive data (e.g., merger synergies, pricing strategies), allowing visibility into compliance-critical sections. 
• Private deals. Bidders can interact with encrypted financial models, such as valuation spreadsheets with locked formulas, to prevent reverse engineering of proprietary assumptions. Sellers can grant time-bound access to founders for uploading NDAs, automatically revoking permissions post-signing to eliminate residual exposure.

Role-based controls ensure compartmentalized workflows. For example, legal teams edit live contracts while investors view finalized versions. All activity,  including document views, edits, and downloads, is tracked in immutable audit logs, providing defensible records for compliance or disputes.

Integrated due diligence сhecklists

Traditional Excel-based checklists crumble under version conflicts and email chains. VDRs transform this process with built-in due diligence checklists with version control. Here is how this feature benefits public and private deals:

• Public deals. Automate SEC-mandated disclosures (e.g., 10-K cross-referencing) while flagging inconsistencies in real time. 
• Private deals. Customize checklists for founder-led audits, like verifying family-held equity vesting schedules.

Granular permissions ensure checklists evolve securely. For example, advisors get view-only access to prevent leaks, while CFOs retain edit rights to update financial covenants. All changes are logged to an audit trail, which is critical for post-deal disputes.

AI-powered redaction

Manual redaction processes are error-prone and time-intensive, risking exposure of sensitive data. VDRs mitigate this with AI-driven tools that automate the detection and masking of critical information across document types:

• Public deals. AI scrubs personally identifiable information (PII) from regulatory submissions, such as SEC filings, ensuring compliance with privacy laws while maintaining audit trails for legal review. This can reduce redaction timelines from weeks to hours compared to manual methods.
• Private deals. Sensitive commercial terms, including customer pricing and intellectual property specifics, are systematically obscured in vendor and bidder due diligence materials. Role-based filters ensure only authorized parties view unredacted content post-close.

Admins can monitor redaction progress through status filters (e.g., “pending review,” “applied”), while draft modes allow legal teams to stage changes before finalizing legal documents. Post-close, unredacted originals remain accessible to authorized users via permission-controlled archives.

Smart Q&A workflows

M&A often drowns in disorganized email chains and misrouted inquiries, delaying critical decisions. Virtual data rooms (VDRs) streamline this through structured, role-based workflows that automate question distribution and accountability:

• Public deals. Automated routing directs questions to subject-matter experts (e.g., legal, financial), while approval chains ensure responses meet regulatory standards before submission.
• Private deals. Buyers privately scrutinize seller disclosures through categorized Q&A threads. Pre-approved answer templates and escalation protocols resolve high-priority items within hours rather than days, accelerating due diligence.

Permissions restrict question editing to authorized roles (e.g., legal drafters, CFO approvers), while real-time dashboards track response progress. Post-close, archived threads serve as legal records, capturing rationale for key decisions.

Example deal structures

The contrast between public and private M&A becomes stark when examining real-world transactions. Below, we dissect two landmark deals that epitomize their respective paths and the divergent strategies they demanded.

Public M&A: Microsoft’s $69 billion Activision Blizzard acquisition

Microsoft’s $69 billion acquisition of Activision Blizzard, announced in January 2022, faced significant regulatory hurdles. The FTC filed to block the deal over antitrust concerns, extending the review process.

The deal was approved by shareholders and closed on October 13, 2023, after receiving necessary regulatory approvals. The acquisition aimed to strengthen Microsoft’s gaming portfolio, particularly in mobile gaming through Activision’s King division, and enhance Xbox Game Pass.

Despite a 98% shareholder approval, the deal faced a shareholder lawsuit addressing procedural violations. The transaction highlights the complexity and long timeline typical of public M&A, especially when facing regulatory scrutiny and shareholder pressures.

Private M&A: Thoma Bravo’s $12.3B Proofpoint takeover

Thoma Bravo closed its $12.3-billion all-cash acquisition of cybersecurity firm Proofpoint in July 2021, transitioning the Nasdaq-listed company to private ownership. Announced in April 2021 and approved by shareholders in July 2021, the deal avoided regulatory roadblocks and closed in three months, a fraction of the timeline for public transactions.

The acquisition prioritized operational agility, enabling Proofpoint to accelerate R&D and expand its SaaS-based threat detection tools without public market pressures. Unlike Microsoft’s Activision deal, Thoma Bravo faced no antitrust concessions or activist interference, highlighting private M&A’s efficiency in tech sectors. 

Best practices for buyers and sellers

Navigating M&A demands strategic foresight tailored to the deal’s public or private nature. Below, we break down advanced tactics employed by the world’s largest companies to optimize outcomes, mitigate risks, and align with stakeholder priorities.

Tailor your strategy to the deal type

• Public deals. Prioritize transparency and stakeholder alignment. Public transactions demand proactive communication to address investor concerns, such as dilution risks or strategic fit, through detailed rationale documents. Engage advisors with finance or accounting experience early, ensuring shareholder proposals align with long-term objectives.
• Private deals. Focus on confidentiality and founder/owner priorities. Structure terms around operational metrics critical to the target’s sector (e.g., customer retention for a textile company). Negotiate equity rollovers or advisory roles to align incentives and avoid decision paralysis common in founder-led transactions.
• Key move. Public buyers should benchmark strategies against peer transactions and regulatory precedents. Private buyers, such as PE firms, must map power dynamics among decision-makers to preempt governance bottlenecks.

Align due diligence and disclosure approaches

• Public targets. Use regulatory filings as a foundation, but supplement with cross-functional audits of supplier agreements, customer contracts, and governance practices. Scrutinize disclosed risks against operational realities to uncover unrecorded liabilities.
• Private targets. Assume incomplete financial visibility in smaller companies. Conduct forensic reviews of internal documents to identify hidden obligations, such as auto-renewal clauses or contingent liabilities. Deploy AI tools to analyze unstructured data (e.g., emails, contracts) for red flags.
• Pro tip. Public sellers should preemptively audit ESG disclosures and governance practices to avoid institutional investor penalties. Private sellers must rigorously sanitize data rooms, removing sensitive employee or customer records that could leak during due diligence.

Prepare for regulatory engagement early

• Public M&A. Anticipate antitrust and compliance reviews by pre-drafting remedial measures (e.g., licensing agreements, divestitures). Collaborate with legal teams to align disclosures with regulatory expectations, minimizing delays from agency inquiries.
• Private M&A. Address niche compliance risks early, such as cross-border data rules or industry-specific regulations. Pre-curate jurisdiction-specific document sets in virtual data rooms (VDRs) to streamline audits and avoid last-minute concessions.
• Critical step. Centralize regulatory workflows in VDRs, tagging documents by jurisdiction (e.g., GDPR, CFIUS) and automating compliance reports. Assign teams to monitor real-time regulatory updates impacting deal terms.

Optimize virtual data rooms

• Public deals. Organize filings into searchable, analytics-enabled formats. Track competitor or bidder engagement patterns (e.g., frequently accessed sections) to refine negotiation strategies and counteroffer timing.
• Private deals. Pre-populate VDRs with templated checklists covering founder equity timelines, customer concentration analyses, and IP audits. Use role-based permissions to simulate buyer access tiers, ensuring sensitive data (e.g., pending litigation) remains hidden until post-LOI stages.
• Why it matters. Staged disclosures balance transparency with risk mitigation. For public deals, VDR analytics deters activist exploitation of public filings. For private deals, encrypted financial models and time-bound access prevent leaks of proprietary assumptions.

Key takeaways

• Public M&A. Transparency mandates invite regulatory scrutiny; extended timelines from shareholder/agency reviews.
• Private M&A. Confidentiality enables speed but risks hidden liabilities; founder dynamics complicate negotiations.
• Due diligence. Public diligence relies on SEC disclosures, while private deals demand forensic audits for unrecorded risks.
• Data rooms. Centralized AI tools, role-based access, and compliance workflows work well for both deal types.
• Success. Public deals should preempt shareholder activism, while private deals must balance strategic flexibility with meticulous due diligence.