Processes surrounding mergers and acquisitions (M&A) have always been complex and time-consuming. Technologies like the virtual data room (VDR) have simplified many elements of the M&A process. But new challenges exist for internal staff tasked with managing the VDR. These individuals must understand the incredible amount and diversity of data required for the deal, as well as the many regulatory requirements governing both the data and the M&A deal itself. In addition, they must now handle security concerns such as reviewer and document permissioning.
This next-level service goes beyond troubleshooting, delivering seasoned expertise and creating a powerful partnership that complements dealmakers and internal staff as they guide a deal to an efficient and successful outcome.
Internal VDR managers face mounting challenges
For those tasked with building and maintaining an M&A data room, the challenges are significant. These individuals can’t be expected to be VDR experts—for many companies, this is their first M&A. For those that do have experience in corporate deals, their knowledge shouldn’t be expected to be comprehensive. They may know the company’s operations and financials inside and out, but familiarity with every technical aspect of a business is unrealistic.
As these individuals begin aggregating information into the data room, the daunting challenge is understanding all of this technical data—what it means, which data is most important, what particular reviewers will want to see, and how best to present it. Every business now produces an incredible amount of this type of data, but the challenge is even greater in industries such as telecommunications, energy, oil and gas, pharmaceuticals and other life sciences.
Additional constraints complicate the challenge of managing these mountains of complex data. The time-sensitive nature of many deals means that timelines are always tight. The confidential nature of every deal limits the ability to recruit help from internal resources with greater expertise in particular areas of the business. On top of this, internal data room managers must often balance the day-to-day responsibilities of their “day job” with their urgent VDR tasks.
Expert Support Team Emerge as Dealmakers’ Secret Weapon
In this high-stakes, high-stress environment, more and more internal VDR managers and dealmakers are leveraging a new secret weapon—VDR service experts. The leading VDR providers now go beyond reliable troubleshooting and technical support, offering 24/7 service from dedicated service teams with decades of experience across the M&A process. These expert service teams take a true consultative approach, helping internal staff understand the mountains of data, structure information to best position the company for success and maximize the potential of premium VDR functionality like advanced permissioning and reporting—all while critically reducing the burden of various time-consuming tasks.
Delivering consultative value throughout the M&A lifecycle
The consultative approach of expert service teams provides a wide range of benefits across the entire lifecycle of the M&A transaction.
BUILDING YOUR VDR
- On-demand training :From the outset, expert support can provide efficient training for all relevant internal parties, making sure internal staff fully understand how to use key VDR functionality and maximizing the efficiencies of the technology.
- Understanding WHAT information to gather: Expert service teams can provide pre-diligence checklists—sample information indexes based on the specific industry and deal type. These indexes not only outline the common types of information to be collected and uploaded, but also suggest where the information can be found and which internal resources to engage to collect it.
- Best practices for HOW to format and structure data: Aggregating data is just the beginning of the challenge. Expert service teams can help internal staff understand and manipulate complex data types. Moreover, a consultative approach provides guidance on how best to format and structure complex data so that it is readily usable to potential reviewers.
LAUNCHING YOUR VDR
- Configuring security and permissioning: As a deal progresses, most seller organizations want to adjust specific reviewers’ access privileges, as well as take advantage of a premium VDR’s advanced reporting capabilities. Building an agile permissioning structure is critical to enabling these functionalities. Service experts can help internal VDR staff take a forward-thinking approach to security and permissioning—based on proven best practices—so a seller can consistently deliver ease of access for key reviewers, while optimizing visibility through smart reporting.
- Robust quality assurance: A reviewer experiencing a usability issue can delay—or even derail—a deal. Service experts can call on their deep experience to provide a higher level of quality assurance, ensuring the VDR is functioning properly, information is displaying correctly and permissions are correctly configured so reviewers have an exceptional experience from start to finish.
USING YOUR VDR
- Urgent mid-deal updates: During due diligence, there are typically many requests to add additional documentation, amend documentation or edit permissioning. Such requests are always time-sensitive, and expert service teams can be called upon to deliver 24/7 assistance with these critical changes. In addition, service experts can assist with other mid-deal updates, including delivering urgent reporting requests that give dealmakers timely insights into reviewer activity and interest.
- Post-integration: extending the value of the VDR: After building an organized repository of a business’ most critical information, many seller organizations disassemble the VDR after the M&A transaction concludes. However, maintaining this comprehensive business data repository can deliver ongoing benefits to an organization post-integration. Experienced service teams can outline these many use cases, and help an organization structure data and permissioning for internal groups to enable efficient internal review and reporting, allow secure review by external consultants or shareholders, and allow an organization to maintain readiness for future deal opportunities. This approach turns the VDR from a targeted M&A tool into a long-term business intelligence investment.
A Checklist for Next—Level VDR Support
For today’s top VDR providers, providing 24/7 technical support and troubleshooting is a given. Businesses looking to maximize the value of a VDR should expect more from a provider’s service offering.
- Expect true expertise: Many VDR providers attempt to cut internal costs by taking a basic customer service approach, staffing a call center with agents that lack firsthand experience with building a VDR and managing an M&A transaction. The leading VDR providers are taking the opposite approach, building service teams of individuals with decades of combined with every aspect of the M&A lifecycle, as well as familiarity with the unique complexities and nuance of deals in specific industries.
- Expect a consultative approach and do-it-for-me service: Basic VDR service takes a do-what-we’re-told approach, largely because agents lack the expertise to provide additional insight. The deep experience of next-level support teams enables agents to take a true consultative approach. Issues and solutions are framed in terms of what an organization is trying to accomplish—in both the short and long term. Equally important, service experts go beyond telling a customer how to solve a problem—they do the heavy lifting themselves.
- Expect consultative expertise as a value-add—not an additional cost: Modern VDRs are incredibly powerful M&A tools. But leading VDR providers know that simply providing the tool isn’t enough. Internal staff shouldn’t be expected to be VDR experts; they need training and support to optimize their use of the tool.
Trusted Partners – Helping Businesses Guide Successful Deals
The anytime-anywhere access, digital security and robust visibility provided by VDRs have already transformed the modern M&A. As forward-thinking businesses aim to maximize the potential of the VDR and gain an edge in the competitive M&A landscape, the value of consultative VDR service experts is emerging as the next transformative differentiator. Businesses that seek out this higher level of expert service reap the wide range of benefits of having an experienced partner at their side as they manage the complexities and nuance of a unique deal in a specific industry—from efficiently collecting, organizing and presenting the right information in the best possible structure, to building permissioning to deliver convenient, secure access as a deal progresses, to positioning a VDR to deliver ongoing post-integration value.