Understanding the Function of a Virtual Deal Room


As the information age has progressed, protecting data is more important than ever. This is especially important during the M&A (mergers and acquisition) process. As such, virtual deal rooms have become increasingly normalized in M&As. However, it is important for those who are involved in this process to understand the value and functions of virtual deal rooms, especially so that their effectiveness can be fully utilized. With that in mind, here’s how you can better understand the functions of a virtual deal room in the M&A process.  .

The Role of the Deal Room in the M&A Process

A virtual deal room is a secure online database where information is stored and accessed. This information in the M&A process typically takes the form of sensitive documents. Using a deal room, companies can store and share documents with other companies they are transacting with in a safe and secure manner, particularly when it contains sensitive information such as financial or corporate information. As such, virtual deals room can be stored off the greater reach of the internet on something called an extranet, and access can be restricted only to those who need the sensitive information as a part of the M&A process.

Reducing Costs and Increasingly Corporate Efficiency with a Deal Room

Maintaining a physical deal room is not only costly, but increasingly outdated. The room needs to be constantly monitored and cleaned, and in the information age, it is unnecessarily and also unsafe to have physical documents located in a file room in an office setting. By using a virtual deal room, you can cut your costs as you will not need dedicated staff to monitor the physical deal room.

 In addition to this, a deal room can also increase corporate efficiency when performing M&As. Because everything in a deal room requires permission access, you can know exactly what information was viewed and copied and at what time. You can also more easily find pertinent information to the M&A within the deal room at time by using advanced search functionality. Certainty that is easier than rifling through filing cabinets and having to constantly send documents back and forth every time a change is requested during the M&A process. This ease of access and the ability to easily disseminate pertinent information with just a few clicks is just one of many reasons why virtual deal rooms are becoming more and more common in the M&A process.

Ultimately, companies need to figure out a solution that suits their purposes. Dealmakers need to consider that not everybody has the same level of familiarity with technology, particularly at the managerial level. However, as managers become more and more tech savvy, virtual deals room will increasingly become the norm. Virtual deal rooms that have easy-to-use interfaces and useful functions will soon take over the M&A world and change how companies conduct business with each other. As such, it is very important for companies to become familiar with this process so that they can better prepare themselves for the future.

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