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Online Data Rooms : Making M&A Easier


Cloud computing continues to influence the way that many companies conduct their business affairs. In many industries, it is essential for companies to keep apprised of the latest trends and technology if they want to retain an edge over their competitors. In some cases, companies must be able to move extremely quickly, or they will miss out on potentially transformative opportunities. This is certainly true with respect to sourcing and closing lucrative mergers and acquisitions. One surefire way to become and remain prepared for prospective transactions is to utilize an online data room.


Here are some ways that online data rooms make M&A easier:

Securely Upload, Save, and Share Documents

Virtually all transactions, and particularly those involved in the M&A process, require the disclosure and review of truckloads of information. Trying to produce and transmit volumes of documents through ordinary email or by furnishing an actual hard copy would be beyond burdensome and expensive, in addition to creating an unnecessarily irresponsible security risk. It seems like anyone who would subject him/herself to such an inevitable, and enormous headache would have to be a masochist. For those who prefer to keep things simple yet secure, it is rather easy and affordable to upload, save, and share the information in an online data room. Keeping relevant items securely stored in an online data room makes it much easier and faster to locate and share items at a moment’s notice, which is always a possibility when faced with an attractive deal.

Easily Assemble and Arrange Information

An online data room can serve as more than a mere document repository. Many virtual data room solutions offer a host of features that also make assembling and arranging information in a coherent manner quick and easy. This may include the creation of folders and subfolders, as well as tagging, highlighting, indexing, and cross-referencing information within and among different documents and files. Plus, by storing all pertinent documentation in a central data room that employs a sophisticated search function, users will be able to find items rapidly and efficiently.

Present Organized Pitch Materials

Irrespective of whether a company is a buyer, seller, or facilitator of a transaction, it is likely that the company will have to, more or less, court and entice some other party involved in the process at some point in a deal. Essentially, companies interested in making and closing deals must be able to present concisely everything that they can bring to the table for a potential transaction. This may involve delivering a professional pitch, providing a simple executive summary, or circulating a detailed business model and plan, among other possibilities. Regardless of which approach is selected, an online data room is the perfect mechanism for putting these items together and disseminating them to the appropriate parties. 

Facilitate Due Diligence

In addition to using a data room to share information during initial negotiations, they can also be used to facilitate the due diligence process once a deal enters that stage. At that juncture, it is particularly important to ensure that the online solution chosen employs stringent security standards, as loads of confidential and sensitive data will likely need to be shared with other parties.

Limit Access to Confidential Items

It can be understandably nerve-wracking when having to furnish financial details and other valuable pieces of information to others, especially when those individuals are complete strangers. Fortunately, by using a data room that offers permissions-based user roles and audit logs of all data room activity, companies can ensure that only those meant to view an item do so. Also, online solutions with advanced encryption, view-only functionality, and dynamic watermarking provide an additional layer of security for important documents.

Online data rooms with practical features and strict security protocols are an excellent resource for all parties to a Mergers & Acquisitions transaction and can serve as a useful tool at all stages of the process.