October 15, 2021

How to find and maximize digital value in any M&A deal

If a company decides to conduct an M&A transaction, it will have a long and drawn-out process that requires a lot of cost and effort. Because of the 2020 pandemic, the face-to-face communication that was so necessary during transactions has had to be replaced by remote communication through technology. This change has meant a major digital transformation for businesses, and even though the pandemic has slowly begun to wane, businesses are in no hurry to get things back on track. With the use of technology, the M&A process has become faster and more productive, and VDRs have helped companies do just that. 

What is an M&A data room?

A virtual data room is a secure online space designed to store and share valuable data between employees and third parties. Data rooms are great for transactions, increasing company productivity, saving time and money for your company and your potential clients. 

The main feature of VDR is its powerful security tools. Companies fully trust this space, and what’s more, they can control the security of their information themselves. 

Why do businesses choose virtual data rooms?

Below we list the reasons why VDRs are considered the best solution for conducting transactions: 

  • Higher data security

Best virtual data rooms providers offer a variety of security methods, for example, the monitoring function allows you to follow the actions of users, you can see which users have viewed which documents, what they have paid more attention to, and on this basis make small predictions and better prepare for the final meeting

  • You as a seller will always be on the plus side

Because you can perform multiple due diligence for mergers and acquisitions at once, you can choose the more profitable option without losing time

  • More reasonable maintenance costs

If you try to do M&A manually, you will see the huge expenses they require, for consumables, staff salaries, etc. The digital option is much more economical and also more efficient 

  • Global availability

You and your clients can access and view your documents anytime and anywhere, the flexibility and remote usability saves you time and empowerment 

  • Accelerated transactional processes 

In the past outsiders had to make an appointment before they could perform a check, now despite the number of people who want to, they can view the necessary documents if they have permission from an administrator

How to prepare a virtual M&A data room for transactions? 

Your VDR needs to be prepared before you start the transaction process. To do so, take the following steps: 

  • Preserve documents

As you know, M&A requires a large volume of documents. To help your partners better navigate the documents, you need to download them into space and organize them conveniently, for easy retrieval 

  • Determine your administrators.

The administrator is a very responsible and important role, only trusted people should apply for this position. 

  • Organize your file system

A well-formed file system also plays a role in speeding up a transaction. Form filenames correctly and clearly or use categories 

  • Download proper documents

Carefully check before uploading if the documents are relevant to the transaction, unneeded and old files (except for old reports, they are important) will only clutter up the space and become a distraction 

  • Maintain and update your M&A data room

Closely monitor the state of your VDR, actively clean it of information that is no longer relevant, and thus simplify all subsequent processes of interaction with the program