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Using a Virtual Deal Room to Enhance Your M&A Process

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In the 21st century, many businesses have moved their operations online. As the proliferation of technology has become more and more a part of business, it is smart for businesses to do so. For one, they can communicate with other businesses and their customers much more easily, and have instant access to many different demographics and markets throughout the globe. As a result of this, many businesses have looked into mergers and acquisitions (M&A) as a way to grow their business. This can even happen when a business owns a domain or digital asset that another company wants to merge with or acquire.

 As such, the M&A process has become increasingly important in the digital age. However, there are serious security and data privacy concerns that crop up during M&As. That’s why it is important to use a solution to organize and secure the transaction to make sure that all of the data and privacy concerns are met. A great solution to do this is a virtual deal room. Simply put, a deal room is data repository that allows you to store and manage your highly-sensitive corporate documents. It is used for many different use cases including fundraising, IPOs, due diligence, strategic business partnerships and, of course, M&As.

In the M&A process, a deal room is a particularly powerful tool. For one, it allows you to store all of the data for this transaction on an extranet. Given that you want to make sure that these documents are not accessible on the actual internet, it is important that a deal room is only accessible by the parties who actually need access to the corporate documents necessary for an M&A. This can be further reduced by setting user permissions on each individual document. This has the great advantage of only letting certain employees and legal counsel touch certain documents, which may not be need to be accessed by lower level employees. Furthermore, setting these users permissions severely reduces the chances of corporate cyber-theft or espionage, which is a serious issue during the M&A process.

While there are many different ways that a deal room can be used during the deal making process, M&As are likely the best use case for this software solution. Not only are M&As critical to get right, but there can also be many problems if any missteps are taken. This can include massive data breaches and the sharing of corporate information or even ransomware attacks, where sensitive information can be sold back to the company or to the highest bidder. In these cases, it is better ot make sure this information is safe and be sorry later, as happened with Yahoo! during their acquisition by Verizon. If you keep in mind all of the potential risk that an M&A exposes a company to, then a virtual deal room really will start to seem like an ideal solution that can prevent headaches down the road and make sure the entire complicated process goes smoothly.

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