A good book investigation is facilitated by a digital data room
In the context of a transaction, thebook investigation usually involves setting up a virtual data room. In a virtual data room data is shared between buyer and seller, where convenience, clarity and security are important pillars.
The seller has a duty to share information with the buyer which is necessary to make a decision about a potential transaction, but also the buyer has a research duty in the context of the transaction. This happens at several points in the sales process, through theinformation memorandum and during the audit. The virtual data room is an excellent tool to share information in a user-friendly way with the right people. By means of the virtual data room, all parties involved in the process have access to the information at any time and documents can be added and questions asked at any time within the virtual environment.
Keep track of who has downloaded what data
It is also important to set up the data room carefully and clearly in order to facilitate the process, where further questions and associated answers should also be recorded within the data room. This makes it easy to determine at a later date what information has been reported to the buyer. For example, within the environment of virtual data rooms it is possible to keep track of who downloaded data at what time, where each user is assigned a personalized user ID and secure password. The virtual environment thus contributes to a clearer and more transparent process during the book investigation.
Ensure data privacy
Data leaks and data breaches have unfortunately become more and more common in recent years. As Florijnz we therefore advise our clients to use the services of specialized providers of virtual data rooms. It is mainly to ensure the sensitivity of the shared information and its security. These providers usually have the highest security measures and are specialized in the safe sharing and storing of data.
A transparent process
In conclusion, virtual data rooms offer convenience to the users, provide clarity and transparency in the process and offer the best security for sharing your sensitive data. If you would like more information on the use of virtual data rooms within the due diligence process or if you have other M&A related questions, please contact us!