4 Signs the Time is Right for a Virtual Data Room

Over the years, the increase in the digitization of both personal and business records has made it possible for organizations to streamline their day-to-day processes while reducing their total operating expenses. One example of this efficiency is in the deployment and management of Virtual Data Rooms (VDRs).

In the past, companies engaging in mergers and acquisitions (M&As) or those in need of better information privacy needed to rely on physical data rooms. These secure rooms house rows of data reserved for secure document exchanges, file sharing, legal transactions, and financial due diligence. However, these facilities are notoriously costly to manage and lack the transparency and accessibility that most organizations need today.

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The Role of Cybersecurity in Due Diligence

Need proof of the importance of cybersecurity in the M&A process? You only need to look at the case of Yahoo.

In July 2016, Verizon announced that it would acquire Yahoo for $4.8 billion. Soon after the deal was publicized, however, Yahoo revealed that it had previously suffered two major data breaches affecting more than 1 billion users, the biggest cyber attack in history. The fallout from this declaration forced Yahoo to knock $350 million off the deal’s original price.

Hacks, breaches, and other cyber attacks can seriously damage a company’s reputation and even cause it to go out of business. In order to mitigate the risks that you face as a business, it’s essential to assess your potential M&A partner’s cybersecurity practices during the due diligence stage.

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The Balancing Act: Perfecting Due Diligence

When planning a merger or acquisition, due diligence on part of the buyer is of critical importance. Not only does due diligence help to identify potential red flags during financial transactions, but it can also be beneficial to both buyers and sellers when revealing fair market values for businesses and assets.

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Assessing Cybersecurity During M&A Due Diligence

When sizing up a potential M&A partner, most organizations focus on practical concerns such as their customer base or new product line.

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How the Latest Privacy Legislation Can Trigger Shareholder Lawsuits

Privacy legislation for online activities is long overdue. Most consumers welcome it because they hope it will help protect their data. However, from a corporate perspective, privacy legislation opens the door for more compliance lawsuits brought on by shareholders, especially for technology companies.

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3 Tips for Maintaining an Organized Virtual Data Room

Decades ago, the file room was often the heart of an organization — information  flowed  in and out of its chambers, bringing critical resources to every part of a company. While  paper  is on the fast track to obsolescence in many environments, the file room has evolved to take up residence on local servers or the cloud, with virtual data rooms making M&A due diligence and paperwork that much easier.

And yet, the  organization  of that data room remains a key aspect of ongoing business success. Check out these three tips for maintaining an organized virtual data room to support your entire organization — whether you’re in the midst of M&A activity or not.

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5 Common M&A Mistakes and How to Avoid Them

According to a KPMG study, attempted mergers have a failure rate around 83 percent. Other research shows a different rate of failure, but it's always above 50 percent, which means you're up against some serious challenges when you step into the M&A waters. CEOs and companies that want to hedge as many bets as possible can learn from common M&A mistakes so they can avoid or mitigate as many hurdles to success as possible.

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M&A: 5 Different Due Diligence Types Explained

Mergers and acquisitions involve an enormous effort and spend every year -- upwards of $2 trillion in the United States annually -- but throwing money at the transaction doesn't make it successful. According to the Harvard Business Review, between 70 and 90 percent of all M&A activity fails. HBR points the finger for these failures, at least partially, at poor research and due diligence.

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The Difference Between an Audit and Financial Due Diligence

For many companies, undergoing an audit and/or financial due diligence will likely be an inescapable reality at some point in their existence, and the idea of undergoing either arduous process is no doubt rather daunting. Granted, they are quite different processes, but they both involve fairly substantial scrutiny of a company’s finances. This can obviously shed a lot of light on how a company is doing, but it can also bring up some unexpected issues and may force a company to have to make some pretty tough decisions. Here is a brief rundown on the primary differences between an audit and financial due diligence:

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How to Organize Your Virtual Data Room for Due Diligence

Meticulous record keeping and an organized data management system are imperative to running a business successfully. Of course, there are also a number of instances throughout the life of a business during which a company will be called upon to furnish some of their records and documentation. This kind of massive data exchange is probably most commonly associated with a transaction-related due diligence investigation. Given the extent of data sharing required during any due diligence process, a coherent document retention and management system will prove critical to sealing the deal. Here is how to organize your virtual data room to ensure your company is adequately prepared for due diligence:

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