Mastering M&A with Virtual Data Rooms: Enhance Your Deal-Making Game with the Leading VDR Provider

The organizers of M&As recognize that successful deals require superior strategy, well-organized due diligence, and integration plans. This article will explore how the cloud-based data room can be applied in this case.

Why M&A data room is better in terms of data protection?

As in other areas of the rapidly developing digital economy, the same applies to M&A: most instruments are isolated solutions. Integration and networking to form comprehensive systems have so far only partially succeeded. Even the substantial international law firms specializing in auditing and legal advice now use mostly insular instruments, one after the other. The digital platform for M&A is, above all, the cross-project data storage in interdisciplinary data rooms, the additional benefit of which lies in automated data searches and the creation of content-related connections: data analytics with the help of artificial intelligence and, in individual cases, also blockchain – for the consistent security of process steps.

At first, glance, using digital applications in the M&A process raises doubts about data protection law, as it is about evaluating highly sensitive data. A closer look, however, shows that the ongoing digitization of this process is at least neutral, if not optimistic, from a data protection point of view. A distinction must be made between the data protection assessment in the M&A process and the post-merger assessment. During the process, using digital applications does not lead to any relevant reassessment of the process from a data protection point of view. Of course, the processing of sensitive data requires a legal basis. However, it also applies to an M&A process in which the term “virtual data room” is still taken literally, and many files must be examined. In both cases, the legal basis usually results from the economic interest in the complete processing of the data provided. In addition, the possibility of anonymization or pseudonymization offers a way to provide more extensive data protection. Using digital data rooms for the post-merger period can bring particular advantages for data protection. The starting point of this consideration is that it should be better and faster.

Leading data room vendors

A virtual data room is an on-demand digital solution that offers companies a secure way to store, manage and share sensitive information – from a customer’s personal information to the company’s financial statements. Among the top-rated M&A data room providers there are:

    • Ansarada
    • iDeals
    • Firmex
    • OneHub
    • Merill Datasite
    • Box
    • Digify
    • Intralinks
    • Brainloop
    • Drooms.

What are the software benefits of an M&A pipeline?

A classic company purchase is, above all, a long-term commitment. Mergers rebuild the value chain and fix it for years. Classic M&A can no longer be the sole solution in the future. But the giant leap in development towards virtual data rooms is progress. Data rooms are used in M&A deals primarily to:

      • Automate work with documents.

The data room has enormous potential to advance your company. Simplified access to information and, as a result, a powerful and precise workflow ensure more efficient work throughout. Internal company processes become more transparent for all employees because changes to certain documents and the path of these documents through the company can be better understood. An increase in employee motivation can often also be seen because the data eliminate many monotonous tasks and create more time for creative approaches.

      • To organize total control over the document flow

Each document in the system is assigned a specific number. All operations that happen are displayed in history. So, you can always track who, at what point, accessed the document and what procedures were performed. Several employees can simultaneously work with the document, optimizing the time resource to the maximum.