M&A transactions proved to be the most time-demanding in the deal-making realm. They require keeping and sharing of many private corporate files that are expected to be examined in-depth before the M&A begins: investor, client, buyer or any other stakeholder is expected to have the exhaustive information on what is the situation inside the enterprise he wants to cooperate with. Therefore, the enterprise has an obligation to provide its stakeholders with all the needed data and with the venue where they have a possibility to look through the information. In the era of universal digitalization, the most adequate and logical solution for information keeping and examination is a virtual platform – digital storage for information which is open for an access 24/7 365 days a year in any place on the planet.
Virtual rooms are especially helpful when the files have to be prepared for due diligence. As due diligence is perceived as rather painful and tiresome process, both sides of the transaction are generally concerned about passing this milestone of the M&A as soon as possible. As for secure data room practice or how to carry through a like-a-flash business audit with the most effective consequence But, distracted attitude towards crucial documents’ examination can have sudden and harmful results. Hence, a prospective buyer is more than engaged into well-organized due diligence course. Virtual repositories are enhanced with a wide range of tools that are expected to facilitate due diligence in particular and the business-making in general. Some of the key tools virtual platforms provide their users with to facilitate due diligence are mentioned below.
Multi-sided safety system
Within M&A projects, many undisclosed files should be shared with the future buyers. That is why, everybody involved in the project are concerned about storing the documents in the most safe venue that can be imagined. Respectable vendors offer their clients VDRs that are provided with a military-level protection system: the documents are protected from destruction, misuse, leakage, etc. The military-level security is generally ensured by such functions as regular backups, 256-bit data encryption, virus scanning, firewalls, 2-step verification process, “fence view” option, dynamic watermarks, etc. – all these features are are expected to guarantee safety to the private corporate documents.
During due diligence not anyone among the users are supposed to access all the files and documents: a repository must permit the data room administrator to divide users into permission groups. Such clusters offer an opportunity to establish the level of information disclosure and to regulate the accessibility of the documents. Thus, the room owner is the only one to supervise who can work with what and how long for via a VDR.
High-quality virtual platforms provide their owners with an activity tracking option – the function that gives an opportunity to follow the activity of all the identified users in the virtual data room. Logical audit reports offer the room owners the data on who logged into the virtual room, when, how much time for, which folders were browsed, downloaded, improved, etc. Due to activity tracking option the virtual repository owners have a chance to search out the most active room visitors and to be sure that in a case of any potential misunderstandings with the employees or potential partners the audit report will be exploited as evidence.
Due diligence has the reputation of a quite complicated and annoying process. Therefore, the simplicity of exploitation is among the most important aspects that should be offered by a virtual platform provider: customers value simple and comfortable data rooms that can be navigated without any special preparation. Advanced search system along with filtering capabilities such a search by keywords, uploading date, file names etc. increase the speed of the work in the platform. The integration with Microsoft office means that the users might work with PowerPoint, Excel, and Word documents and are not expected to change them. All the listed functions allow deal participants to focus their attention on due diligence. Moreover, launch of the mobile application accelerates the data analysis significantly as all the folders are synchronized on all the devices and the deal participants might work wherever and whenever it is comfortable for them.