Businesses today are finding it a necessity to share electronic documents within the organization and outside, to disseminate data to their shareholders, investors, clients, partners, customers and regulators. With the introduction of new mobile devices, the way people are working in an organization is changing radically and there is a pressing need to incorporate these devices without compromising the security of the data being shared. Unlike a few years ago, organizations can no longer bank on the security of network perimeter technology in order to prevent or control the sharing of documents through mobile or third party devices.
It is believed that the market for mergers and acquisitions transactions will continue to remain robust in the months to come, which is why the need to complete deals in a highly efficient manner has never been more significant. At the same time, there is an even greater need of compressing the amount of time taken for due diligence in M&A transactions. But to reduce the amount of time taken in completing a deal, there are huge risks involved as well as the budgets associated with such transactions. The market requires specific solutions from technology and service firms to meet their demands. Outdated and low levels of security can wreak havoc and reap terrible consequences for organizations that need to maintain their confidential business data, especially if it falls into the wrong hands. The unauthorized sharing of sensitive business information can prove detrimental to a company’s financial stature as well as its reputation, and cause a breach of trust among its shareholders and people involved in the transaction, resulting in a disruption of the deal. Of all the vital constituents needed to ensure a successful transaction, business information and document security is one critical element that does not allow any room for error.
For a number of years, the solution to meet the demands of security in M&A transactions and deals was to initiate a physical data room, supervised by physical security staff, where shareholders and investors involved in the deal would be able to spend a good deal of time to examine the data stored in the data room. In spite of it being a logistical nightmare for a number of organizations, a physical data room was considered to be a seller’s ideal solution to address document security requirements while at the same time permitting potential investors to carry out due diligence. Despite stringent and rigorous physical security measures, there have been numerous attempts to foil M&A deals through the misplacement or stealing of sensitive information even in such cloistered environments. Confidential information would get altered or hidden by dishonest individuals in spite of meticulous security.
However, in a recent development, a new solution has emerged in the form of online virtual data rooms or data sites that assume the concept of a physical data room and enable confidential business data to be made available to the right people in a highly protected electronic environment. This recent phenomenon has now become the benchmark in the marketplace of M&A transactions and deals of all sizes. Considered to be far more effective than any kind of physical measures, the online virtual data room is a huge technology advancement that has had a massive impact on the way due diligence is now being conducted.
With an online virtual data room, buyers and sellers can both profit from the electronic equivalent of the conventional physically based data room, as digital documents can be easily uploaded or scanned in a secure repository, based online. Through the use of a web browser, buyers can view the information present in the online repository from anywhere across the world, without having to travel to a physical destination in order to retrieve specific disclosure documents. The VDR is also of great benefit to the seller, more than any other stakeholder in the deal, as sellers can now make use of a single online document library to upload disclosure documents and index them easily in a safe environment. With the VDR, any number of buyers are able to conduct due diligence simultaneously, thus increasing the number of buyers for the seller and further ensuring a better chance of concluding a deal on positive and agreeable terms.
VDR & LockLizard DRM Software
With LockLizard DRM software, organizations can build their own secure VDRs, with total control of their confidential business information, its location and management. Through the secure VDR, organizations can control how users view their sensitive business data and what they do with them.
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