Mergers and acquisitions require lots of paperwork and business transactions may include sensitive information. Therefore, the due diligence process can be lengthy and complicated, requiring several people to look over different files. VDRs can simplify the process and offer enhanced security and visibility.
VDRs can be used to monitor activity on files and folders, which is one of the greatest benefits they bring to M&A. This can be useful when determining who is the most interested in a certain part of due diligence. It can also help to filter out problematic or uninterested prospects. A great VDR will allow users to track the amount of time potential buyers are spending looking through specific company documents and if they have printed any documents.
Workflow and organizational tools are also essential elements of the VDR. Certain tools allow you to label documents to indicate that they’re scheduled for integration during due diligence, which is a great method to prepare in case of any issues following the deal. Many higher-level VDRs are designed for M&A will make use of artificial intelligence to enhance workflow and organize documents, which will reduce the amount of work that management teams have to do during due diligence.
When selecting the right VDR to support M&A transactions, make sure it was designed specifically for this kind of business transaction. DealRoom is a good example. It was created by M&A experts and integrates a VDR platform with an Agile-based Project Management Platform to meet the specific requirements of this type of business transaction. Firmex and Merrill are also excellent alternatives for VDRs designed specifically for M&A but they provide limited features to handle the complexity of this kind of transaction.