M&A deals management with Data Room

Modern M&A deals are very complex, even if Fortune 500 companies are not involved. There are such a vast amount of paperwork that needs to be stored for all participants to see and have available that there just needs to be central document storage location that all participants participants can turn to in order to get the information they need. Otherwise, everybody will be wasting a lot of time simply searching for information and then having to wait again for another participant to grant them access to a document if you use something like Google Docs. Therefore, a virtual data room really makes everybody’s life a lot easier and makes a complicated deals, such as mergers and acquisitions much more manageable. Let’s take a look at some of the other ways virtual data rooms facilitate M&A transactions.

M&A Virtual Data Room

M&A data room

Nowadays, a new modern security threat has emerged called corporate espionage. This includes members of your company or a partner company illegally downloading or otherwise illegally obtaining information and transferring it to a third party. A virtual data room can help you mitigate this risk with granular access permissions. As the administrator of the data room, you have full authority in terms or granting, revoking or restricting document access and viewing permissions. For example, you could allow some participants to download or edit information while granting others only document viewing permissions. Keep in mind, you can always revoke access permissions if you so choose.

If you are really worried about certain information falling into the wrong hands, you can set document access expirations or even revoke access remotely. Some of the most innovative data rooms offer additional cutting edge document security features such as “Fence View” which serves as a physical barrier between the document and the user and can help prevent camera based attacks. Afterall, if someone really wants to get their hands on a certain piece of information, they will be willing to go to great lengths to get it and taking out their phone and simply taking a picture of the computer screen is not a problem for them.

Maintaining confidentiality is not something that is restricted to just documents. The communication that goes during the transaction must remain secure as well. Whenever a new document is uploaded into the virtual data room, someone is bound to have questions about it. Instead of using external resources, such as email, to ask and answer questions, all communication can be done inside the data room . This is much safer than communicating via text or email since the data room security is much stronger and it also keeps a detailed record of all communications. This will be very useful in the event of a legal dispute.

Anybody who has ever conducted an M&A transaction knows that they are performed in several stages. First is the exploratory, or pre marketing phase, where all of the documents pertaining to the transaction are uploaded into the data room, thus making all of the necessary material available to all participants at a moments notice. This allows for a great amount of agility and flexibility if new investors show interest in the deal and they do not have to wait a long time to see the necessary documents. This reality facilitates all of the groundwork that must be performed in order to get to the next stage of the process which is due diligence.

During the due diligence phase, all of the documents pertaining to the history of the company are uploaded into the data room. At this stage, it is important to study all of the crucial records, especially the ones that concern the finances and the legal framework of the company. During this stage, potential buyers usually ask questions about these records and will request additional information if needed. Instead of having to mail such such documents or using a courier service, they can simply be uploaded into the data room for all or certain participants to see. Everything remains secure and you eliminate some of the logistical bottlenecks that come with sharing documents via traditional methods.

Once the due diligence is complete, the deal itself is performed and the data room, along with all of the documents inside, is archived. Some data room providers will give you the option of downloading the contents of the data room to a DVD or a flash and they will also store it on their servers for a certain amount of time, in case you need to go back and review certain materials. This will be very useful in case you are having trouble integrating any legal, financial or IT departments since the virtual data room can continue to be of use as a central document storage location.

As you can see from all of the steps that are involved in an M&A transaction, there are a lot of documents involved, lots of sharing and tons of communication that needs to happen as well. Instead of storing all of your documents in one place and communicating in another consider doing everything in one convenient location that can guarantee the security of your data and the privacy of your communication. Only a virtual data room can give you the tools needed to put you in the driver’s seat and conduct the transaction the way that is the most convenient for you. Consider conducting your next M&A deal inside a virtual data room and you will be surprised how you ever got along without it.