Data Room is a digitally secure environment where all of the company’s relevant data is collected. The data is made to the prospective buyer for review. Here is more about Data Room as M&A management software.
What is M&A management software?
One of the areas of implementation of integration processes at the enterprise level is the deepening of integration between them during the implementation of joint activities. The most characteristic manifestation of such integration processes is the intensification of mergers and acquisitions (M&A). The goals and objectives of these agreements are extremely diverse: from combining capital to achieve joint projects to gaining full control over the industry market through hostile takeovers of major competitors.
With the internal and external transaction teams on both sides, the circle of those involved quickly becomes very large and complex. Digitization offers enormous potential for transactions. A digital end-to-end M&A deal management software is based on artificial intelligence (AI), combines various tools, and could make the entire M&A process easier and more efficient.
With the cloud solution, data can easily be exchanged within a company or with customers and suppliers. Nowadays secure Data Rooms are mostly organized for M&A projects, due diligence reviews, asset transactions, board communication, real estate, and contract management.
The Virtual Data Room (VDR) offers numerous advantages in corporate transactions, which are beneficial not only for the seller but also for the customer. In principle, the software represents a company sales portal, which, however, is often associated with user costs. There is a fast and secure way to process M&A transactions.
The M&A platform should be open to everyone involved, such as sellers, investors, banks, tax advisors, lawyers, M&A advisors, and even competitors. It makes it easier for all parties to work together via an easily accessible web-based platform.
What are the advantages of M&A Data Room?
M&A management Data Room brings advantages for all parties involved – sellers, buyers, and advisors. They are as follows:
- The seller gains access to a larger group of investors, which increases the likelihood of a successful sale. The negotiating potential also increases with the number of potential investors. And automated processes accelerate the entire process.
- The investor benefits by gaining access to significantly more takeover properties. Since investors often pursue several takeover objects at the same time, lean processes are a plus point.
- Data Room implies software for automating most business transactions to bring them into a common interconnected database necessary for the operation of the enterprise.
How to set up M&A Data Room?
When preparing and preliminary reviewing the M&A transaction, the goal is to gather all the necessary documents. At the checkout, the company contacts the VDR service provider. Then there are six basic steps to set up VDR:
- A conference call or seminar is held with the customer and all VDR participants who are instructed to use VDR.
- Customer needs are assessed, including the number of pages loaded into the VDR, the pages to be scanned, the number of buyers, the request to access the VDR, and the duration of the data processing.
- Customer and supplier sign a standard service contract.
- VDR is created based on customer requirements for storage capacity and the number of users. This is done either from scratch or using a predefined template.
- The pages are scanned and loaded into the VDR and an online index is created.
- Maintenance issues are fixed, including technical assessment.