Virtual data rooms have been very popular with companies that practice M&A deals lately. This is due to VDR’s unique set of features which can meet all the needs of companies at every stage of M&A. This includes a high level of security, flexibility, organization, and document management and in this article, we’ll take a closer look at how VDR can help you.
Why the data room is useful for M&A deals
When you’ve made the decision to execute an M&A transaction you should be prepared for the fact that you’ll have to give access to your confidential documents to unauthorized people. Constantly sharing large amounts of documents can result in a data breach if you don’t use trusted software. Virtual data rooms for M&A are a secure space that has the level of protection of banking systems and can provide a secure interaction between buyer and seller.
Above all, VDR helps you organize all your data within the digital space. To do this, it uses automation features, namely mass upload or drag-and-drop functionality for all documents from the desktop to the space, automatic indexing when uploaded, and smart search functionality. This makes it much easier to structure data in the program.
VDR also helps bridge the gap of interest between the two parties during a transaction without the fear that information might leak to competitors.
Benefits of a virtual data room in mergers and acquisitions
The use of VDRs is now a fairly common way to conduct mergers and acquisitions, all because companies know the benefits it can bring them:
- VDRs are much more practical than physical data storage
The era of paper documents and huge physical archives is long gone. Today’s companies no longer need to rent a building, hire security guards, and meet in person for a certain amount of time. Now all data is available in a single online space, where any automated user can log in through any device from anywhere.
- Great level of functional and non-functional security
The administrator of the space has full control over access and interaction to the documents located inside the digital data room (data room digitale in Italian). You can assign permissions either based on roles or manually, assigning which documents should be viewed by one group or another (e.g., only legal documents will be visible to legal consultants, etc.). You can also monitor all users’ actions within VDRs and track the documents they have interacted with.
- Data leak protection
Data rooms provide strong data encryption at rest and during document sharing and protect entry from unauthorized access with dual authentication. VDRs also have the ability to watermark their documents as an indicator of company ownership. Dynamic watermarks allow document activity to be tracked, even outside the space, which also helps reduce the chance of data leakage.
Data rooms for taking out M&A deals
These days, many companies can’t imagine the M&A process without the help of tech tools. Virtual data rooms combine all the features required for a successful transaction: remote communication, mobility, security, and ease of use.
The interface of the programs is as simple as possible because providers realize that companies do not have a lot of time to learn a new system. Also, this simply reduces the risk of human error. The chance that you will press the wrong button and do something wrong is almost zero because all functions are arranged intuitively and even your invited users can easily adapt.