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Why Every M&A Transaction Should Be Done in a Virtual Deal Room

For many years, M&As (mergers and acquisitions) have been on the rise. As fewer and fewer companies compete in the same spaces, many of them are interested in combing their assets through various types of financial transactions, which include everything from merging with another company, acquiring them outright, or consolidating with them. This can even happen between divisions or entities that are already under the same corporate parent company. In the tech world, Alphabet is a good example of this, as they own Google along with other more ambitious subsidiaries such as the self-driving car startup Waymo and the artificial intelligence company DeepMind.

Both companies were acquired by Alphabet, of course, and were done so using the M&A process. While it is impossible to know the exact details of these acquisitions, it is almost certain that they used a deal room or similar tool to make sure that the acquisition went smoothly. Not only are deal rooms a secure solution for pouring over legal and financial documents, but they also allow users to track changes and create viewing permissions for specific users. This helps to make information confidential and only accessible on a need-to-know basis, which is helpful in M&As.

A deal room is fundamentally about security though, and allows both parties to have peace of mind when going through the M&A process. The truth is that M&As produce volumes of confidential documentation, all of which needs to be secured. With cybercrime having risen over 300% in the last year alone, it is more important than ever to invest in digital security solutions that guarantee the safety of sensitive transactions such as M&As.

When protecting sensitive documents, a deal room is a solution that is both easy to set up and easy to use. Your chosen deal room solution should make it easy to exchange and access documents within a customized dashboard. It will also have drag-and-drop functionality that allows you upload and organize files. Organization is key during the M&A process, and it is likely that the business itself will have to reorganize after a merger or acquisition. As such, it is important for a deal room to be able to house all of this documentation and any new documentation that is created to reorganize the business. To do this, you will want to make sure that your deal room not only allows for user permissions but also gives you a strong peace of mind that any of the sensitive documentation that is uploaded will not be deleted, stolen, or corrupted in any way.

There are, of course, numerous reasons to why any company may want to go through the M&A process with another organization. However, it is essential that any transactions that take place during this process are both fluid and secure. Without the use of a deal room, it will be difficult for your company to stay organized during this process. This can result in some fatal mistakes that may have serious effects on a M&A, which should be avoided at all costs.

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