Start from the absolute basics and learn how to set up a M&A data room

Companies look for new ways to organize business collaboration in a modern digitalized information society. This article will teach you how to set up a virtual data room and increase sales successfully duting M&A transactions.

How to simplify M&A deals with data room software?

The main goal of M&As is to increase the combined company's value by achieving synergies, realizing the hidden opportunities that arise from the transaction, and creating new strategic advantages. It is one of the current business development strategies. Growth through acquisitions has become the most important success factor for many companies in the new economy. Mergers and acquisitions were the only factors in the growth of their market capitalization. However, implementing several problems is primarily associated with low corporate culture and high legal risks.

Against the background of the ongoing economic effects of the energy and corona crises, it is to be feared that more and more companies will slip into the red and face the threat of an emergency sale or bankruptcy. As a result of the pandemic and energy crisis, experts expect a significant increase in distressed M&A transactions soon – especially among smaller companies. In the past few months, we have already noticed an increased demand for data rooms from smaller companies primarily looking for a fast and easy-to-use virtual data room solution for carrying out due diligence. Many companies are conducting due diligence for the first time and cannot afford top consultants in the sales or financing process. The number of sales-relevant documents is often relatively small, and even a Q&A functionality in the data room is unnecessary. For these use cases, complex functionality would be counterproductive. For most sellers and bidder users, ease of use of the data room is much more important than extensive functionality.

In addition, when it comes to reducing costs and improving the cost of a transaction, M&A data room providers offer several values because data is stored in the cloud, and travel expenses for bidders and investors are eliminated. So, how to use this software?

How to set up M&A data room: common steps

We have prepared a basic guide on implementing an M&A data room solution. There are the following steps:

  1. The first standard sales pipeline with stages is automatically created when setting up an account in the data room.
  2. When creating sales stages, it is necessary to understand what exactly they are necessary for. After passing the transaction on the data room sales pipeline, it will independently record statistics for each stage, which you can see in the analytics section in the future.
  3. It is necessary to create a deal. There are several opportunities for how to do this – the “new transaction” button, rapid addition to the funnel, and contact and the company to the card.
  4. The transaction card is divided into two parts. On the left side, you enter all the information about the transaction, the contacts related to it, and the company. On the right is the event of events. It records the whole history of work with the deal.