Mergers and Acquisitions – Use a Data Room for M&A Due Diligence

Acquisitions and mergers are a popular way for businesses to expand, but they can also be risky. It is crucial to be aware of the risks that can be incurred during these transactions, and also how to avoid them with the right tools at your disposal. A virtual data room is one such tool that can help navigate the M&A process in a smooth manner from due diligence to integration after the deal.

M&A due diligence is a common use scenario for the VDR since buyers require access to large volumes of sensitive documents as part of the M&A process. A physical data room can be expensive however a virtual room has a user-friendly interface that allows both parties to exchange information without the need to travel. A VDR can also be removed anytime, ensuring that confidential information is not divulged outside of the M&A deal.

It is crucial that you fill your online data room with all the data required to conduct M&A due-diligence. This includes a variety of categories, such as operational information (customer lists, supplier contracts, employee handbooks) as well as legal information (corporation documents shareholder agreements, shareholder agreements, intellectual property filings) and commercial information (market research reports, sales figures and competitor analyses). Also, you should consider including any relevant patent documentation. Not least, you should provide all financial statements that could be used to determine the financial standing of the company.