Here is an article from our Premiere Sponsor, Merrill DataSite, who provide completely secure online Virtual Data Room (VDR) solutions that efficiently houses critical business information.
While many believed the “electronic age” would greatly reduce hard copies of documents, in reality, paperwork has greatly increased. Nowhere is this more true than in the M&A market where keeping proper paper trails are the keys to success. This is where a virtual data room can help mange M&A documentation.
What is a Virtual Data Room?
A virtual data room (VDR) is an online repository of information and data that is used for both storing and distribution of documentation. A virtual data room is often utilized to facilitate the due diligence process during any M&A transaction. Historically, the due diligence process took place in a physical location for document disclosure. Today, virtual data rooms are now used over a physical location to help ensure security, save money, travel time and improve efficiency.
The Use of a Virtual Data Room in M&A Transactions
The use of a virtual data room is a much more efficient way to proceed with all that is involved with an M&A transaction. This virtual “location” allows those involved in the transaction secure access to all the documentation associated with the M&A process, regardless of their physical location. A virtual data room also ensures confidentiality throughout the entire process, as well as document accessibility in a controlled environment.
If documents are shared conventionally in a physical data room, while all security best practices are surely implemented, the potential for security breaches still exist. Additionally, utilizing a physical data room can be time consuming, since one bidder team can access the data room at a time in most situations. If a physical data room is used, it also means that those involved in the due diligence process will need to travel to the data room’s location, thus wasting travel time and money.
When a virtual data room is used in lieu of a physical data room, individuals can access information simultaneously from any location. Security and confidentially is maintained and wasted travel time is greatly diminished. Additionally, the data can be accessed any time, day or night, from anywhere in the world.
Ultimately, when a virtual data room is utilized, travel time and costs are reduced and secure document accessibility is improved over the use of a physical data room. This can speed up the due diligence process and help complete the M&A transaction quicker than using a physical data room.