WHAT HAPPENS WHEN YOUR DEAL CLOSES?

Speaking with our valued client, Victor Sundh of Eversheds Sutherland, we explore what happens at the end of deals and the key role that USB archives play in their closing.

As projects come to a close, hard copies of the data room or USB archives must be created and handed over as part of the signing and closing process. This is a full record of what has been disclosed during the project, and will be an accurate, relied-upon version of the truth for both parties.

Why is it important to receive USB archives?
“The hard copy must always be attached to the agreement before closing. It’s important to see exactly what has happened in the VDR so that sell-side and buy-side have an accurate point of reference to rely on.”

These USB archives are part of the official documentation that signifies the successful sale of an asset. On the USB, buyers will find all the information that was available to them during their time in the Virtual Data Room.

What would be the implication of not receiving one?
“This would lead to serious implications for all parties. Buyers would have a lack of information on their acquisition and sellers would not be able to prove what had been disclosed were a dispute to arise. Not to have a transparent archive leads to a situation no one wants, word against word.”

While some VDR providers will only provide archives upon request, at Sterling it is an integral part of closing your data room and fully included in the cost. The use of a USB archive means that information purchased is entirely transparent and can help to settle any disputes that might occur after purchase.

These USB archives carry extremely sensitive content, holding deal documentation in full next to private and confidential information about the parties involved in the project. Needless to say, these USB drives must be exceptionally secure and subject to the highest standard of care in both creation and delivery. Sterling subject each USB to a three-step quality control check and provide ‘Comfort Letters’, as standard, attesting to the accuracy of the information contained.

What role does the ‘comfort’ letter play?
“Comfort letters give all parties peace of mind that what is contained on the USB is what was agreed upon during negotiations, and cannot be edited after a given point in time.”

As a first layer of defence, access to the USB itself is blocked by a pin code. All information therein is fully encrypted and viewed on a read-only basis, meaning information cannot be altered after the USB’s creation.

Turnaround time is vital to this process. Standard USB delivery is within 48 hours of the request but can be sooner if critical. Sterling creates archives in both the UK and mainland Europe to increase the speed of delivery and avoid any Brexit-related customs friction. Secure, trusted couriers are used but we are also able to hand deliver in person.

Would you ever use a VDR provider that does not offer USB Archives?
“If it is up to me to decide, the short answer is a big no. I’d rather walk on Lego without shoes. To be able to prove what has happened in the transaction is essential to the whole deal.”