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M&A Process: Why Dataroom Software is a Must

Mar 25, 2022

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Among all possible business transactions, mergers and acquisitions might be one of the most complicated. It includes a delicate due diligence process that presupposes sharing a business’s sensitive info with other parties involved in the transaction. In its turn, this aspect of the deal requires reliable means of ensuring data protection, which can be a challenge for a physical data room.

Time, money, and safety challenges of M&A were those stimuli that urged developers to create online data room software capable of facing them. When searching for a reliable vendor for conducting an M&A transaction, visit dataroom-providers.org to read the latest reviews on the top VDR providers offering the best options for this procedure. However, to learn more about the software abilities necessary for M&A, stay with this blog.

Virtual Data Room: What Is It Used For?


An online data room is complex but easy-to-use software tailored for storing and exchanging information during business deals. It can be seen as a secure repository that every company can adjust to its needs. The soft is indispensable in various situations but let us list some of the most typical business deals carried out via VDRs:

  • Mergers and Acquisitions (M&A);

  • Fundraising;

  • Strategic Partnership;

  • Legal Audits;

  • Operations with Intellectual Property;

  • Initial Public Offering (IPO);

  • Board Communications.


These and similar operations require simultaneous access of several parties and reliable document exchange among them. For the time being, the most secure solution for this is virtual data room software.

M&A Due Diligence: Types and Tasks


All of the above transactions usually include the procedure of due diligence. It concerns first of all M&A operations. Whether you buy or sell a company, you will be involved in this complicated procedure of assessing a business as well as checking its sustainability and investment worth. There are several due diligence cases:

Business Due Diligence is focused on the financial side and the company’s potential in general.

Accounting Due Diligence is aimed at checking how accurate the company’s financial documentation is.

Legal Due Diligence includes audits of the current business’s contracts. The main goal here is to ensure the legality of the transaction.

IT Due Diligence may require checking how stable the company’s  IT resources are.

Environmental Due Diligence can be necessary, too. There are cases when the acquirer should measure the environmental risks before buying a company.

So, when you initiate an M&A process, you should be ready for interaction with various specialists like lawyers, accountants, investors themselves, and many others. Let’s find out why online data rooms are the best places for doing this.

Online Data Room Features: Why Are They Crucial for M&A Due Diligence?


An electronic data room is an optimal solution for mergers and acquisitions. Its tools allow organizing and carrying out the whole procedure from the beginning up to the final. Consider the most useful of them.

Security Options


Virtual data room software incorporates the latest security technologies ready to protect your deals on several levels. The main focus is on sharing data, so the security of this process will be ensured due to the following means:

  • Data Centers with certifications of FINRA, ISO 27081, and SOC2 used as document storage;

  • Seamless info backup with the highest uptime rates (99.9%);

  • Several methods of encryption, at least, 256-bit;

  • Audit Logs that help to monitor the users’ actions in the data room in real-time.


Access Tools


The access instruments of your online data room also serve to ensure the security of your documentation. The only difference is that you can manage them yourself. Most VDRs allow several levels of access. This option is a must when you have to invite various professionals and let them view your most sensitive papers.

To protect your information, you can give different types of permission to your guests. That is, some of the documents will be only accessible for a small group of your partners while the others won’t be able to watch, copy, download, or print them.

Additionally, you can set certain login rules with the usage of the two-factor authentication and a customizable confidentiality agreement. All your guests will have to pass the procedure and agree with the rules to enter the data room.

Document Management


This is a big set of tools with different purposes. When you only start using a virtual data room, you have to accommodate its storage to your documentation. You can organize it according to your needs and create all the necessary files with the required indexing. After this, your papers can be uploaded to the storage. Here, they will be securely kept and ready to be found at whatever time you need them. The top handy options are:

  • Drag & Drop Upload;

  • All formats supported;

  • Full-text search;

  • Automatic indexing, and numerous others.


Moreover, your options here will include digital rights management (DRM) tools. They also ensure information security and prevent your information from authorized use. The options at your disposal will include:

Redaction tools

They will allow you to remove sensitive info from the documents so that the wrong eyes cannot see it.

View-only option

These tools won’t let anyone copy, download, or print especially important papers of yours.

Digital Watermarks

To confirm your ownership, you can supply your documents with watermarks. They do not only work for textual papers but also can be used for videos, etc.

These are only the top essential tools you will need for M&A transactions. However, their full set is much broader. For instance, you can expect 24/7 support, feedback options, and many more.

Final Thought


M&A procedures may include several phases and one who sells has to prepare a huge number of documents for each of them. On the other hand, one who buys is interested in a quick and transparent analysis of the offered papers.

A proper online data room has all the necessary instruments for both the parties and all other participants. This software can provide businesses with enough security and let them conduct such time-consuming transactions as M&A due diligence more quickly and more effectively.