Due diligence is an inevitable stage of the deal-making process, especially when it comes to merger and acquisition deals. Due diligence is aimed at in-depth investigation of all the relevant documents that show company’s performance (for instance, its financial results). Data examination is of a crucial importance for at least one but significant reason: a potential partner has a right to know all the details about the company he is about to work with and a potential acquirer has a right to know what exactly he is about to buy. Therefore, due diligence should be conducted meticulously and attentively.
However, the process of documents examination seems to be time-consuming and tedious. Thus, often both sides of the deal are trying to get over it as quickly as possible. This might lead to unpredictable misunderstandings, complaints and disappointments in the future. So what can be done in order to keep due diligence focused on every minor detail but simultaneously to speed it up? The answer is – a virtual data room. This online storage for digitalized documents can bring numerous advantages to the deal participants and to facilitate due diligence. The following list includes only the top-5 benefits a qualitative VDR can offer.
1. Time savings
A decent VDR enables execution of a deal in a short time period. Being accessible 24/7 worldwide, virtual data room gives deal participants right to check the documents and to conduct due diligence whenever it is convenient for them with no duty of arrival to the physical data storage. In addition, a VDR can be entered by a multiple bidders simultaneously which eliminates a need to form and follow a queue. Thus, a potential partner/acquirer can be found quicker and the deal time can be shortened.
2. Cost savings
Conducting due diligence in physical data rooms is expensive for both sides of the deal. A seller needs to pay rent for the room and to cover expenses on security and supervision services. Meanwhile, a buyer has to spend money on travelling and accommodation for those who are supposed to examine all the documents in a place of their storage. A VDR cancels all the physical and geographical restrictions imposed on due diligence. Hence, no additional expenditures are required.
When uploading sensitive and confidential documents to a virtual data room a company can be sure that they are going to be safe. Complex security systems of VDRs ensure that data will be protected from leakage and misuse. For this reason, due diligence stage is no more a period when strictly protected data becomes available and, thus, vulnerable.
4. Simplicity and convenience
Usually, VDRs are enhanced with numerous features aimed at making cumbersome due diligence process smooth and simple. Among such features are advanced search functions, integration with Microsoft Office, development of mobile applications that provide instant access to the documents, etc.
As it was already mentioned, at due diligence stage confidential data becomes vulnerable to some extent. Such VDR feature as regular audit reports helps to track all the activity that happens in the room. Hence, the room owner knows for sure who did what with the documents and data he exposed in the data room. At the same time, a potential partner has guarantees that such a report can be used as evidence in a court in a case of a legal trial.
So, virtual data rooms can facilitate and make due diligence process easier and faster. There are numerous vendors that are ready to provide their clients with qualitative and reliable VDRs. iDeals belong to the top-10 vendors that have a reputation of trustworthy iDeals data room providers. iDeals virtual data room has all the functions mentioned above and, thus, can guarantee its clients that they will pass the due diligence stage of their deals as painless as possible.