Sixty-five Percent of All Transaction Due Diligence Done Online

Virtual Data Room usage growing rapidly — shorter bid periods and accelerated deal times are only a few of the many benefits.

August 7, 2008
Sponsored by Merrill DataSite™

Fueled by globalization and advanced technology, business transactions are being completed at a record pace and Virtual Data Rooms (VDRs) are proving essential. This online medium reduces deal time and provides both buyers and sellers with better information management tools, allows M&A professionals to quickly and efficiently view relevant content and facilitates transactions around the world.

A VDR is the electronic equivalent of a paper data room. This online document repository facilitates the secure exchange of sensitive information between buyers and sellers during a merger or acquisition, IPO, secondary offering, bond financing, credit facility or restructuring, significantly reducing transaction costs and time.

Rapid, Steady Migration From Paper to VDRs

For more than 70 years, the paper data room has been well-known as the secure venue where proprietary business documents and financial data are made available for due diligence review. Today, industry experts estimate that 65 percent of all M&A (mergers and acquisition) assignments are now being handled through VDRs.

Buyers desiring to quickly determine a potential target's value enjoy the convenience of working from the comfort of any Web-enabled portal. As all relevant financial and corporate infrastructure information is efficiently organized and made available online, diligence teams can take advantage of the VDR's electronic search and navigation tools to aid in their discovery process.

One of the market's leading VDR providers is Merrill DataSite. With Merrill DataSite's advanced features, all documents are viewable in a common format and are 100 percent text-searchable in any Romance language. In turn, buyers may easily identify documents of importance and bookmark them using an electronic equivalent of a "Post-it®" note. Review teams gain peace of mind knowing they are equipped with a tool that allows them to more easily uncover answers to pertinent business questions. With full search functionality, buyers can more thoughtfully establish a basis for the price they are willing to pay for an asset under consideration.

Determine Buyers' True Level of Interest and Intent

For corporate managers selling their assets, a VDR's reporting tools represent a great value in determining a buyer's intentions. With Merrill DataSite, for example, sellers can access the reporting tool and identify who is reviewing data, which documents are being reviewed, for how long and in what order, allowing a seller to determine how serious the potential buyer is. If the reports show that "C-level," and not junior level managers are reviewing the documents, the opportunity may be judged as more realistic.

Gain Greater Control and Flexibility Over the Data Display

Greater control and flexibility in the organization and presentment of data is another benefit of the VDR. Sellers can more easily cast a wider net to engage qualified bidders in an effort to maximize sale price. VDRs employ rigorous security protocols that regard each person in the data room as a unique entity. Site administrators are given controls that allow them to grant or limit document access and actions such as viewing and printing.

Adding Language Translation to the VDR

With unique requirements particular to European markets, it can often be difficult to move information from one country to another. A VDR transcends physical boundaries by capturing, indexing, presenting documents and making them accessible from any Internet browser. Equally important, potential language translation requirements must also be addressed. Merrill DataSite has upgraded its VDR services by adding translation features for both machine and certified renderings, providing viewers with more flexibility and speed.

Technology That Transforms Deal-making

Regardless of the complexity of a given transaction, a smooth due diligence process that reduces transaction time is a critical element to deal-making. VDRs are designed to optimize the due diligence process. What makes Merrill DataSite unique is that from the moment you turn over your content, it delivers an unbroken, end-to-end "chain of custody" using its own people, facilities, processes and technologies — from scanning and indexing to project management and technical support. With its deep roots in financial and legal document solutions, DataSite’s parent, Merrill Corporation, has a cultural organization-wide discipline in the management and processing of confidential content. Whether it's an M&A deal, IPO or secondary offering, REIT, loan or financing facility, bankruptcy or any other transaction requiring a due diligence effort, Merrill DataSite enables faster, smarter and better deal-making.

For more information please go to: www.datasitedeal.com/seo36.