Data rooms for enhancing M&A deal value

Data rooms for enhancing M&A deal value

Digital data room management software is a convenient way to optimize M&A procedures in the company and manage sensitive data. It is becoming increasingly popular due to general digitalization and the acceleration of technological progress. So, how to enchase the deal value with the help of this digital solution?

Innovative data rooms for M&A deals

Despite the difficult period of COVID restrictions, the mergers and acquisitions (M&A) market work better than in the previous crisis years of 2015-2017. The main drivers of transactions in a crisis are either the need to get rid of non-core assets or the desire to buy cheaply a company that is experiencing financial difficulties. M&A transactions are a compelling growth strategy and a way to add value, easily measured by shareholder value. However, the value of a company also depends on cash flow, making it all the more difficult to understand why optimizing working capital often falls behind in M&A deals. Therefore, before arranging the transaction, many companies implement virtual data room software to organize efficient and transparent online collaboration and, as a result, enchase M&A deal value.

A data room is a flexible, highly scalable platform that integrates easily with an organization’s IT infrastructure and databases. According to, the purpose of its introduction is to create an effective environment for the management and functioning of an enterprise with the joint work of several users with a single interconnected database. The data room software performs many other useful functions. Among them are customer accounting, sales management, analytical functions, document management, and many others.

When using data room for M&As:

    • not hours, but seconds or minutes are spent searching for documents; waiting for documents is not required – documents are simultaneously available so that all employees have the right to access them;
    • the process of agreement and approval of documents becomes transparent and takes place in real-time;
    • time for transferring documents between departments is not wasted at all – cards and document files are available in real-time to those employees who have all access rights to them;
    • preparation of standard reports on the movement of documents is done with one click of a button;
    • The absence of key employees in the office due to business trips does not stop work with documents – the new generation data room provides the possibility of remote work with documents both through a web browser and by e-mail.

How does the software operate?

M&A data rooms enable the management and structuring of documents so that the seller can always update documents and potential investors have access to complete and up-to-date information at all times. Good data structuring is a prerequisite for smooth workflows, more transparency, and easier findability of information.

The auto-allocation and auto-naming data room features are based on machine learning algorithms and learn from individual behavior and patterns. Auto-allocation is an intelligent feature that categorizes and assigns documents based on their content, then automatically assigns them to their index points. The assignment is based on a predefined and trained or user-defined index standard. With large amounts of data, individual standards can also be developed and trained for the company. This feature mainly helps the party that provides the documents in the data room. If documents are moved in the register or index, the machine learning algorithm considers this input for all further uploads and places the files with increasing accuracy. Another advantage of auto-allocation is that the upload process of files does not have to be monitored, saving time. A final check is carried out at the end of the upload by the user, who then can confirm or reject the machine’s suggestions.