29 January, 2023

Business owners and CEOs are tasked with keeping their companies competitive in their market. One way companies can do this is through mergers and acquisitions. Mergers and acquisitions can benefit a company financially and allow them access to more resources. Though it has advantages, the process can often be lengthy and complex. Luckily, new technology like virtual data rooms (VDRs) are making mergers and acquisitions much easier and more secure. Below you'll find information on how mergers and acquisitions functioned before VDRs and how VDR technology has changed the process:

Mergers and Acquisitions: The Process

Whether you're setting up a merger or an acquisition for your company, the first step is research. After establishing guidelines for what type of business you're looking to merge with or acquire, you can begin your search. Once candidates have been established and contacted, the merger or acquisition can really begin.

When a target company has been selected, the potential buyer should evaluate the company. This entails reviewing financial information and other sensitive documents about the company's business dealings. After evaluation, the business owners can negotiate and agree upon a deal.

It is also customary to engage in a process called due diligence prior to finalizing a merger or acquisition. This allows the purchasing company to perform a detailed analysis of the target company. Due diligence helps a purchasing company determine how the two companies and their assets will work together. This involves in-depth collaboration and document sharing between representatives from both companies.

Due Diligence Before and After Virtual Data Rooms

The most significant changes to mergers and acquisitions since the advent of virtual data rooms can be seen in the due diligence process. Before VDRs, target companies had to find means of sharing a high volume of sensitive business and financial data in a secure way.

In many cases, target companies developed physical data rooms. These were locations where sensitive documents could be printed, stored, and reviewed by potential buyers. Physical data rooms provided security but also demanded a lot of resources from the company engaging in due diligence. With a physical data room, purchasing companies were responsible for getting their representatives to and from the physical location to review the documents. In many cases, this involved flying representatives to a different state or country and paying for their lodging and expenses during the due diligence process.

Today, virtual data rooms simplify the requirements of the due diligence process. A VDR provides a secure virtual space where documents can be uploaded and viewed from anywhere. A target company can upload documents and records into the VDR where they can be reviewed by users from the purchasing company. By using ShareVault for your VDR needs, you also gain access to our security features which allow you to control individual user access and permissions.

Contact ShareVault Today

The process of due diligence has changed a lot in recent years thanks to developments in VDR technology. At ShareVault, we offer secure document-sharing solutions that can help reduce operating expenses, increase operational efficiency, and even increase your overall return on investment. Contact us today for more information about using ShareVault virtual data rooms.