Virtual Data Rooms for Mergers & Acquisitions

Financial globalization and liberalization, as well as the possibility of free and fast movement of capital, carries both advantages and threats to the financial stability of the capital market. But at the same time, taking into account the latest trends in the global capital market and the interest of foreign investors in investing capital, the main task is to perform the M&A with the help of data room software.

Understanding the M&A Deal Flow

One of the most dynamic directions of corporate growth strategies of companies – M&A (Mergers and Acquisitions) – requires special attention. It is chosen for a number of reasons, including increasing the efficiency of the target company, removing excess capacity from the industry, providing access to product markets, acquiring skills and technology faster and at lower costs, quickly identifying winners, and helping them grow their businesses.

The experience of leading companies in developed countries proves that the cooperation of enterprises on the basis of fair competition has a positive effect on the results of their activities, strengthening their positions in a certain market segment, contributing to the improvement of the quality of products or services, the introduction of new technologies, the expansion of the circle of consumers, etc.

The virtual data rooms software for M&A, unlike other project management software, is more focused on documentation and information exchange. For large projects, proper documentation is definitely the key to more organized tasks. Find out how the support service works and how quickly the team responds to your request. This is important in order to ensure that the necessary care is provided quickly. M&A is a rather complex method of capital accumulation that requires a significant expenditure of time and initial investments of the issuer’s financial resources.

How to Use the Virtual Data Rooms for M&A Transactions?

So how do virtual data rooms work to improve the M&A deals? During the M&A, the absorbed company serves as a kind of donor, which transfers its assets and liabilities to the acquiring company, and acts as a kind of platform for the realization of the goals of the acquiring company. The main targets in the market are those companies whose shares are quite dispersed, and the board of directors owns a small number of shares and has an unsatisfactory state of information about trends in the securities market.

It is highly recommended by professionals to use the VDR for M&A because you may:

  • Invite whole groups of operation participants to VDR in a matter of minutes: import user lists in Excel or CSV files to it.
  • Easily and quickly add and remove members and specify access rights to documents using simple tools.
  • Organize members’ work more efficiently: create user groups and assign group permissions to folder and file types.

But these benefits can come with additional risks, including expanding the network perimeter, expanding the threat surface with an unknown administrative group, and sharing infrastructure. However, by applying database security best practices, the cloud will be more secure than most companies on-premises, with less cost and more flexibility.

The VDR team, in close cooperation with our tax law colleagues, will advise you on structuring the purchase procedure. IT will provide support in the preparation of a confidentiality agreement and execution of a letter of intent as part of Due Diligence, as well as in the preparation of a sales contract and conducting negotiations for the conclusion of such a contract up to its execution.