Analyst using pen to point to data on computer screen

Merrill Corporation

Datarooms

What is a traditional data room?

A traditional data room is a secure space used to house, organize and exchange data among parties involved in a strategic business transaction. Traditional data rooms are physical locations where paper copies of documents are compiled, stored and managed.

What is a virtual data room?

A virtual dataroom is a secure online repository of documents used for hosting and the distribution of information. Typically, a dataroom is used to facilitate the due diligence process during an M&A transaction or other capital transactions. The dataroom allows administrators to make confidential documents available at will while being able to monitor reviewers’ due diligence actions.

What are the risks in using a consumer grade file sharing system vs a purpose built virtual data room?

Consumer grade file sharing systems such as Box, Dropbox™, and Google Drive™ market themselves as low-cost solutions for the high-stakes challenges of M & A due diligence. However, recent security incidents have shown that they are not a viable solution for the requirements of a secure, purpose built application that targets the challenges of complex M & A due diligence.

Why use a data room such as DatasiteOne designed exclusively for the M & A industry?

The process of participating in a successful M & A transaction is a complex process for both buyers and sellers. The abundance of minute details involved in this multifaceted practice requires the intricate coordination of vast groups of personnel, the sharing of sensitive business information, revealing time-sensitive milestones, and the discovery of hidden costs while maintaining accurate communications to all participating parties. With the importance and size of today’s M & A transactions, enterprises must rely on leading solution providers that can eliminate both the security and legal risks associated with these procedures while facilitating the distribution of critical information during this essential business process.

What should I look out for when choosing a data room for M & A?

While options exist in the market, they are certainly not equal. When evaluating providers, it is best to grade on six criteria:

  1. Speed - Opportunities arise quickly. The top viritual data rooms are built for rapid implementation no matter the size or complexity of the deal and site content.
  2. Simplicity - As the pressure of transaction due diligence rises, you need an application that is intuitive, smart and efficient. One that delivers features and functionality to drive efficiency and unlock productivity for users on both the sell-side and buy-side of corporate events.
  3. Security - Comprehensive M & A due diligence is simply too important to trust to off-the-shelf file sharing services that are vulnerable to malicious intruders. Proper controls not only protect your sensitive content, but also secure your competitive advantage.
  4. Service - Always on, omni-channel support, with fluency in multiple languages.
  5. Innovation - High velocity, foward-thinking, agile product development that continously delivers new features and functionality.
  6. Expertise - Best-in-class providers stay on top of ever-changing regulations and industry trends so you can focus on optimizing deal outcomes. Select a provider that brings deep, industry specific subject matter expertise and will offer best practice guides for data room setup and ongoing support throughout due diligence lifecycle.