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A virtual data room for mergers and acquisitions helps simplify due diligence. It will eliminate the need for document photocopying and indexing, and some of the costs associated with travel with physical rooms. It can also make it easier to locate information through the use of a the ability to search for keywords. Additionally, it allows bidders to conduct due diligence from any place around the globe.
A VDR provides the capability to control access for users and provide an audit trail for activities that help companies meet legal requirements. For instance, limit access to certain folders. For instance, one that shows the details of employee contracts. This information is only accessible to HR and senior management. Ross states that this is crucial as it prevents accidental disclosures, which could lead to a lawsuit or damage the integrity of a deal.
VDRs also help reduce the risk of data breaches. This is one of M&A participants’ top concerns. According to a study conducted in 2014 by IBM Human error is the reason for data breaches in 95 percent of cases. However the use of a virtual data room can minimize the risk of a breach by encrypting all information and employing a variety of security practices, including two-factor authentication, multiple firewalls and remote shred.
Before you start the M&A, it’s worthwhile to sketch out your ideal vision of a VDR. This can be as simple as sketching out a rough sketch on paper or as detailed as a schematic in a graphics editing software.
