The benefits of a Virtual Deal Room for the M&A process

deal room software

Virtual Data Room is an alternative solution for those who are looking for a company-safe and employee-friendly solution for document collaboration and corporate file storage.

Virtual Data Room in M&A deals

With the development of the economy, companies constantly need to respond to changes in the environment appropriately. In this regard, organizations are working on modeling new business strategies, setting goals and objectives, and adjusting the company’s business processes in the appropriate style. For many companies, business restructuring is the chosen development strategy, therefore, today such transactions are gaining momentum, in comparison with the statistics of previous years in the world community.

The most popular form of business reorganization remains mergers and acquisitions (M&A), which are still considered the most difficult and risky. The main goal of such associations is the desire of the initiating companies to realize the synergistic effect, which manifests itself in economies of scale, expanding the range of products or services provided, strengthening market positions, and so on.

The motives of companies in the implementation of M&A transactions are varied, but in general, they boil down to obtaining a certain benefit as a result. Often, buying companies decide to carry out a deal precisely on the basis of these potential benefits, calculating what positive effect the acquired company can bring to their business.

Companies often face many challenges and complexities in the transaction at every stage, especially in the process of physical integration. Thus, the necessity of implementing IT solutions for simplifying the M&A process is growing. One of such solutions is Virtual Data Room (VDR) designed for secure file management.

VDR is a global leader in the networking market that operates in five strategic areas:

  • backbone routing,
  • switching, and services;
  • products for group work on the network;
  • virtual data centers, cloud technologies;
  • video technology;
  • architecture for business transformation.

Safe storage of corporate documents and online collaboration with Online Data Room

Since M&A is surrounded by a very complex legal environment, lawyers also play a key role in the success of the acquisition process. There is a Due Diligence process in M&A of both private and public companies. Realizing potential opportunities requires careful consideration of risks at all stages of the M&A transaction process. In this case, Data Room as a safe repository is an important element.

Data Room Due Diligence is a comprehensive financial and economic analysis of the transaction, including an assessment of the company’s activities, investment attractiveness, risks, possible outcomes of the transaction.

The traditional organization of virtual deal room is aimed at performing the following functions:

  • organizational and documentation support of the enterprise;
  • organization of a single procedure for working with documents in departments;
  • organization of individual and joint content preparation of documents in subdivisions;
  • exchange of documents within and between structural units of the organization;
  • creation of unified technological procedures for the passage and processing of documents in units;
  • use of unified forms for processing documents;
  • registration in the Data Room of all documents received by the organization, with further referrence to correspondence for management and departments;
  • ensuring the storage, accounting, and use of documents;
  • creation of appropriate conditions for documentation and organizational and technical support of the organization’s management, timely provision of complete, accurate, and reliable information on the status of preparation and execution of documents and instructions;
  • conducting information and reference and analytical work on issues of documentation support for all parties to the agreement.

The legal validity and provability of an electronic document in the Data Room are provided by an electronic signature.

Author: Tyler Booth

Tyeler Booth [email protected]