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When an asset or business is up for sale, key documentation must be shared with potential buyers. In a Virtual Data Room (VDR), this documentation is guarded by permission-only access which provides potential buyers a secure platform to perform due diligence, establish a value or single out risk areas. In addition to giving strict control over where data is stored and who can access it, VDRs grant critical insight into buyer activity making them a vital tool in speeding-up transactions.
Whether you are a start-up in your first round of investment, or a multinational, publicly-listed company, the integrity and security of your data must be a high priority. We hear about information leaking from high profile security breaches regularly and this can be devastating for confidential M&A projects.
Our applications are deployed on physical servers that are located in highly secure data centres. Regular penetration testing, alert systems and controlled access all minimise any risk of a data-breach.
M&A projects often involve multiple parties interacting with your data. There may be competitors you are inviting in with whom you don’t want to share key contractual information. Or there may be assets you are targeting to some parties but not to others. VDRs use a permission-only access scheme that allows you to decide which users can see which documents and for how long. And on top of this, whether they can download them (secured with a watermark) and also for how long this download will be viewable before it ‘self-destructs'.
We have also introduced a redaction tool directly into our data rooms. Files with sensitive data can now be shared whilst hiding classified data for example; words, numbers or names.
VDRs come with in-built dashboards that record every user interaction. The digital footprints that emerge can be analysed to reveal key insight into potential buyers and their intentions. More information also means a significant head-start on potential queries. If, for example, the question of disclosure were to ever come up, you are able to prove who has seen what, down to page-level, and who made it available.
Communication throughout an M&A process is key, and this is when a number of considerations should be taken into account. For example: can questions be responded to quickly and accurately? Is there an audit trail to track when questions were raised or answered? Is the communication as a whole confidential and secure?
Collecting questions in Excel and emailing them for comments amongst working parties can seem like a short cut. However, managing multiple versions of files and having no limits on how many questions are raised, or to what they are referencing, can leave sellers inconvenienced. There is also an inherent risk of relying on email for security.
Our data rooms have an in-built module so you are able to manage question priority and limit the number raised by a buyer. You can assign experts to categories and include an approval workflow to ensure answers are checked and approved before they are returned. All this communication takes place within the secure environment of our VDRs and is of course fully auditable.
It is important for VDRs to be fast, reliable and easy to use, but when the heat is on during a project it reassures to have help on hand. We provide a 24/7/365 support service to assist in any VDR-related task and will also act as an extension of your deal team when you need them. The team are fluent in your buyers’ languages and are able to take on as little or as much as you need. If any changes need to be made to permissions; if any of your buyers are having trouble with their IT systems; if any help is needed to redact an index in time for bidders to view files the following morning – our team will be there.
The M&A process is highly confidential. In the race for a successful sale, M&A projects operate on accelerated timelines with highly demanding professionals, costing a lot a money. The VDR provides an environment that further speeds up the M&A process. Common risks are mitigated and control is given back to the seller.
If you would like more general information on data rooms, including some advice on how to pick a provider that works for you, here’s our list of FAQs.
