What do M&A Leaders require From Data Room Software?

Storage of business documentation is a basic need in any organization. Therefore, a centralized electronic data room has become an essential element for the activities of almost any modern enterprise. This article will analyze how this software is used in M&A procedures.

Why is data room software essential for M&A deals?

The communication between the participants in an M&A process places extensive demands on confidentiality and security. On the one hand, this can be guaranteed through limited and controlled access and includes protection against possible inspection during data communication, i.e., transport. On the other hand, the same applies to accidental or unauthorized disclosure to third parties or the possibility of duplication by creating digital copies of the documents.

Therefore, modern IT security solutions consider these requirements by using modern encryption technologies when establishing the connection to the electronic data room. Furthermore, the assignment of time-limited access IDs with the help of tokens makes it possible to avoid errors when selecting a password and the impermissible disclosure of these to unauthorized third parties. Documents can then be viewed with the help of a browser whose settings prevent further use of the document for making a copy, a printout, or for sending via e-mail. At the same time, the current user and the current date and time can be integrated into the document with the help of digital watermarks. The user can also be identified when a photograph of the screen content is taken.

How to operate in the M&A data room?

Potential buyers receive an Internet link from the seller or from the commissioned M&A advisor, which, in conjunction with standard Internet access and a browser, can be used to access a secure area of ​​a server. Before entry, interested parties must authenticate themselves with their name or account and a password. You will then be given access to the relevant and assigned area to you. Based on the existing, uniform database, different structures and representations can be implemented for different profiles and users. As a result, it makes it easier for certain target groups to find the content and documents they need.

The navigation through the digital database takes place with the help of an almost intuitively operated graphical user interface, which allows access to documents and content by clicking and allows inspection. At this point, the user only has the opportunity to read the existing documents. It means that further use or copying is not possible. If desired, a log-out procedure disconnects the connection to the server and its data area again after successful inspection.

What benefits does the data room offer?

The virtual data room provides the following functionality for working with M&A documents:

  • Support for streaming input, bulk input of documents;

  • Scanning and recognition of documents with the definition of critical fields;

  • Barcode recognition;

  • Formation of a control card for each recognized document;

  • Sorting when uploading documents into the system according to specified criteria in predefined folders and storage sections.

Finally, it should be noted that with the help of solutions from ​​content management and collaboration, other aspects of M&A activities, such as company valuation, contract design, and post-merger integration (PMI), can also be simplified. It can contribute to a significant increase in efficiency and shortening of the overall process of company purchase or sale.

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