Acquisition and merger deals require lots of paperwork and business transactions could contain sensitive information. Therefore, the due diligence process can be long and complicated, which requires multiple people to look over different files. Fortunately, VDRs can help to simplify the process and offer increased security and visibility.
One of the greatest advantages that VDRs bring to M&A processes is their ability to monitor activities on files and folders. This can be helpful when determining who is most interested in a particular aspect of the due diligence process. It can also be used to weed out uninterested candidates or problematic ones. A good VDR can allow users to monitor how long prospective buyers spend reading specific company documents and if they have printed any files.
Workflow and organizational tools are also key elements of the VDR. Certain tools permit you to label documents to indicate they are scheduled for integration during due diligence, which is a great way to plan ahead for any issues that may arise after the deal has been completed. Furthermore, many of the higher-level VDRs for M&A use will employ artificial intelligence to improve workflow and organization. This can reduce significant amounts of work for managers who are overworked during the due diligence process.
When choosing a VDR to support M&A transactions, make sure it was specifically designed for this kind of business transaction. For example, DealRoom is built by M&A experts and integrates VDRs that have an Agile-based project management platform to meet the unique requirements of this kind of business transaction. Firmex and Merrill are also excellent options for VDRs built specifically for M&A but they come with limited features to handle the complexity of this type of transaction.