It's understandable that M&A professionals might consider cloud-based filing-sharing apps good enough for due diligence and other aspects of deal management because they are great for many kinds of work. However, the broad functionality of these apps is often ill-suited for the specific needs of an M&A transaction. That's where a virtual data room (VDR) comes in—purpose-built for managing a deal from the start.
VDRs have a number of important features for M&A that file-sharing services lack: automatic indexing, document watermarking, audit trails, user analytics and reporting, and tracking viewed/unviewed document status—greatly exceeding the capabilities of business file-sharing solutions. Using a VDR specifically engineered for M&A conveys a professional, sophisticated approach to due diligence while driving efficiency for all parties. Below, the SRS Acquiom team highlights why a VDR tailored to the needs of M&A will more effectively support your next deal.
A File Sharing App Will Often Cost More Than a VDR When Other Expenses are Factored In
The right VDR solution will often cost less than you think and may even be free. Opting for file-sharing apps, with their predictable monthly fees, may seem cheap and easy, but it can quickly end up costing more if attorneys, bankers or other advisors must use a tool that makes them less efficient. Any difference in the stated cost can quickly be overwhelmed when professionals have to bill by the hour for non-substantive work.
An M&A VDR Makes Your Deal Process Look More Professional
When it comes time to sell your company, you want to present it in the best light possible. This includes making it look like you are using sophisticated and appropriate tools to run the deal process. Ask any M&A practitioner who has been in the trenches of M&A due diligence—either populating the data room on the sell-side or conducting thorough reviews as a buyer or advisor—and they will tell you a purpose-driven tool with functionality specific to M&A deal needs can dramatically increase efficiency and set the tone for a cooperative and productive deal process.
A Secure M&A VDR from the Start Keeps Sensitive Data Safe
A VDR that is tailored to the needs of M&A deals can help ensure that confidential and sensitive information remains safe. Free and even subscription-based file-sharing apps, or even those with monthly subscription plans, often lack the security levels required by M&A deal parties. A VDR solution with enterprise-level safety features offers optimal security.
Effectively Manage Access and Audit Usage with an M&A VDR
Due diligence needs can vary from deal to deal. Running a virtual data room for an auction process differs from a deal under exclusivity with a buyer. Flexible user access and detailed tracking are critical to ensuring that the appropriate deal parties are accessing the right information. Event tracking, analytics, and reporting capabilities built into VDRs designed explicitly for M&A can help eliminate administrative hassles and busy work.
An M&A VDR Is Backed by Reliable Support from M&A Experts
Issues and questions often arise in the detailed, fast-paced world of M&A due diligence. Having a support team that truly understands M&A broadly and due diligence specifically can mean the difference between efficient and inferior due diligence. Buyers expect an easy-to-use VDR platform with readily available expert-level support when needed.
The good news? There are VDRs purpose-built for M&A that offer transparent, fixed-fee pricing options. Some can even be bundled with other services from the same provider, resulting in a VDR that ultimately doesn't cost you or your clients a thing.
M&A deal-making is an intricate process. A fully functioning VDR that is purpose-built for M&A eases the demands of due diligence and keeps deal parties on track, on time, and on the same page—and can also impress buyers with a professional approach from the start.