Prepare Your M&A Deal Documents With Virtual Data Rooms

M&A deals require a large volume of documents and additional information from the seller’s side. Sometimes this influx of requests becomes too much, and it can be difficult for company employees to handle everything. But by using a virtual data room, you can greatly simplify and streamline many of the transaction processes. A well-structured VDR will give you easy access to the materials you need and speed up the due diligence process. In this article, we’ll look at how best to prepare your data room for the M&A process. 

Draw a diagram of your virtual data room vision 

Before you start uploading the documents you need for the transaction, you need to know the exact layout of your file structure. This process has several benefits: first, it will help you further, speed up the due diligence process and make access to the data as clear and comfortable as possible for both your employees and invited users. Secondly, it will give you a clearer idea of what documents you need to provide for verification and how to regulate access to this data.

This draft will be good support for you, minimizing errors during the direct organization of the data and means that you will not be drafting in a hurry and on the fly. Draw a rough diagram of folders and subfolders on a sheet of paper, under each folder sign the documents you plan to add to it and decide on a clear name for each folder, avoid acronyms, and use dates for reference. 

Assign access to the appropriate people

When regulating access to documents, it’s important to find a happy medium: on the one hand, if you give access and opportunities to too many people you may expose your data to the risk of leakage, but on the other hand, it increases the trust of the other side, makes the process more transparent and improves communication. Below, we’ll provide some guidance on the best way to grant access permissions in the VDR space: 

  • Potential buyers are best given limited access to documents -Mergers and acquisitions are often not limited to potential clients alone, but giving each of them leeway into your confidential documents would be unwise, even if they have given an NDA agreement
  • If you have a “human resources” folder, it should not be shared with anyone other than human resources or supervisors
  • If you have any pending business transactions, access to them should be carefully limited. You may give potential buyers access to them, but it is best to conceal the names of the companies that were involved in those transactions with you

Create a systematic filing system

When creating a filing system, it’s a good idea to keep the most important filing folders at the top of the list. Professionals recommend creating a chart in which the folder should include the main documents, teasers, NDA agreement, presentation, and possible additional documents, such as financial reports in Excel form. 

Documents can be divided into confidential and non-confidential. To do this, create a separate folder with strictly confidential data that only upper management and buyers at the very last stages of the transaction will have access to.

Also, don’t forget to keep your documents up to date, delete old ones, and add new ones. That way, you’ll eliminate distractions for your clients and speed up the due diligence process. Find the right data room provider to meet any company’s requirements at Explore reviews, contact vendors, and order the right services for you.