The Exploitation of Data Room: M&A in Its New Form

The first data repositories, at that moment, land-based, were opened to provide deal-makers with a place where they could exchange documents with their potential buyers or partners. The idea behind such rooms was more than simple: an owner of a certain company was the one to open M&A data room and to fill it in with hard copies of the relevant files. When all the preparations were over it was time to invite visitors and to let them perform M&A due diligence. Even though physical rooms enhanced data examination and preparation to the deal execution, they were not perfect. To participate in due diligence, bidders had to arrive personally to the place where all the documents were stored. Being not a huge problem, it still triggered a sequence of inconveniences.

m&a data room

The solution emerged when the first virtual repositories appeared in the market: from now on, merger and acquisition transactions moved to the virtual space. Actually, the algorithm of work did not change – the only difference was in digitalization of the process. No more piles of papers, no more business trips, no more queues – with the launch of M&A VDR the majority of imperfections inherent to physical repositories vanished. The new technology brought freedom of actions and convenience to deal-making as businessmen got a chance to forget about minor routine nuances of work and got a chance to focus on meaningful aspects of their projects.

The Best Data Room Providers for M&A

The popularity of cloud-based repositories grows: it seems that deal-makers are afraid to lose their positions in the market in a case they ignore the transition of data exchange and storage to the cloud. Under such circumstances, the market expands and new M&A data room providers appear. The variety of vendors is crucial as it gives companies and private entrepreneurs an opportunity to find a platform that meets their needs and financial abilities. Apparently, a room suitable for a huge cross-national corporation would be useless for a small firm.

Even though almost all the virtual data room providers promise to find an adequate solution for each client, it has nothing to do with reality. Indeed, the division of vendors is rather obvious: some of them clearly state that they work only with large clients, some of them prefer small businesses, some focus exclusively on M&A deals, while others are ready to work with representatives of various industries and assist them throughout any projects.

It is impossible to name the best venue for M&A as numerous aspects and criteria are to be taken into account. That is why each deal-maker has to perform in-depth virtual data room comparison to decide which vendor is capable of offering reasonable conditions for collaboration.

The Main Benefits of Using VDR for M&A Deals

When it comes to M&A in India the situation is identical to the rest of the world: deal-makers gradually switch to virtual spaces and give preferences to virtual rooms instead of land-based repositories. The reasons why cloud-based data room services are that popular are rather clear:

  • Due diligence runs faster;
  • Numerous tools simplify the work inside the room: it is easy to filter files, to search out the required documents, to edit files, etc.;
  • Due to digital rights management, one room can be exploited for various projects at the same time: all the visitors get permission to browse certain files while the rest remains hidden;
  • Audit logs help a seller to monitor all the bidders and to spot the most engaged visitors;
  • All the files are protected on multiple levels.

Hence, with the help of a virtual repository, any M&A can be executed faster and with fewer resources spent.