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Do you use a virtual data room in your M&A's?

Scout Young's Profile

Answers

Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

Yes. It is expensive(ish) and annoying (seem poorly constructed compared to plain DMS's) but having the third-party lockbox is pretty much de rigeur.

Most recently used Datasite.

The main reasons (that I know of) are:
-The data doesn't truly pass until the transaction is complete, so the seller has a modicum of protection in that way.
-On the buy-side; you want that locked up so that if there is any mis-representation or critical documents, they don't go missing.
-On either side, if it was internal then you'd be granting an external party a window through your firewall (which isn't done).
-On both sides there may be only a few people "in the know". Inviting IT to the party is (without any negative connotation towards them) is bringing in a "doesn't need to know" on either side.

Cheers,

KP

Topic Expert
Linda Wright
Title: Consultant
Company: Wright Consulting
(Consultant, Wright Consulting) |

Yes, for the reasons Keith cited above, and, the convenience of the potential buyers who then do not have to "live in" the data room.

Topic Expert
Bob Stenz
Title: Controller
Company: Silicon Valley start-up
(Controller, Silicon Valley start-up) |

I agree with both Keith and Linda. However, I complement the dataroom with the use of DropBox for 1) large files too big for the data room and 2) convenient file sharing with folks not included in the dataroom, but part of the M&A effort.

Topic Expert
Michael Bateman
Title: Principal
Company: The Bateman Company
(Principal, The Bateman Company) |

Absolutely. Virtual data rooms make it easier for sellers and buyers alike. A side benefit for the seller is being able to see what documents the buyer is focusing on. Further, I believe that companies should consider a virtual data room from early on to 1) avoid having sensitive data on internal systems and 2) to have a central repository for all key corporate documents that is easy to monitor and access. There a number of companies that offer the service ranging from large established companies with comprehensive solutions like Merrill Corp to younger companies like ShareVault which is feature rich, easy to use and technologically current.

Topic Expert
Dana Price
Title: Vice President, M&A
Company: McGraw Hill Education
(Vice President, M&A, McGraw Hill Education) |

Love it, can't live without it. I am partial to Intralinks. It is a great day when you can start a mgmt presentation off with, "how would you know how well we are doing if you have yet to log into the data room"

Topic Expert
Jim Quinlan
Title: CFO, Managing Director
Company: Trinity Group, BlueGold, Genergy, Wellco..
LinkedIn Profile
(CFO, Managing Director, Trinity Group, BlueGold, Genergy, Wellcount) |

Yes. It helps speed up the process, so, ultimately, pays for itself.

Topic Expert
J.D. Floyd
Title: Owner, CFO
Company: CFO Outsourcing Solutions, Inc.
(Owner, CFO, CFO Outsourcing Solutions, Inc.) |

Yes; best way to maintain version control and after hours document reviewing (there is always someone who needs to review something on "their time" over the weekend while are to available).

J.D. Floyd

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

Yes have used Sharepoint effectively. Making read-only original source documents available to team, version control as already mentioned and making sure overall conclusions and recommendations are well integrated based on the due diligence of the entire cross functional decentralized team.

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