Financial results, technical datasheets, more photos, and information on lease agreements. All available information will be in one place with a virtual data room.
What Is the Concept of Virtual Data Room?
So what is a virtual data room? This is an Internet site, usually created for a specific period and for a specific purpose, which provides authorized users with access to a secure database of documents, in accordance with their access rights.
Before the era of the spread of broadband Internet access, familiarization of potential participants in the transaction with the documents looked like this:
- The seller allocated or rented one or more premises in which folders with paper documents were demolished, and recorded in the expense item the rent or lost profits from the misuse of the premises.
- A schedule was drawn up for visiting the room and working with documents for potential buyers (bidders), which, with a significant number of them, significantly increased the time of the transaction.
- If the bidders were from another city or country, their representatives happily went on a business trip to world cultural centers and reluctantly – to industrial regions, spending time on the road and money on increased travel allowances.
Actually, the virtual data room just solves the problem with time, cost, and ease of access to documents. The classic VDR system includes the management of production, purchasing, sales, human resources, and warehouse stocks. At the same time, the financial module is only one of the simplest parts of the system. Automatic scheduling of the load on production lines in the VDR system is carried out by processing the indicators generated by the orders entered by the customers.
When planning production and calculating the cost, the VDR system also takes into account the time it takes to change equipment when changing the range of products. Ultimately, this leads to the emergence of the possibility of integrating automated technologies to reduce the labor intensity of procedures in in-house business processes through e-commerce tools.
Why Does Your Company Need a Virtual Data Room Service?
Your company needs a virtual data room service in the implementation of mergers and acquisitions, as there are always subjects for whom the above changes are undesirable and for whom, in the absence of unambiguous regulation, this concept can be interpreted in their favor against a bona fide market participant. In addition, mergers and acquisitions always affect the interests of employees, shareholders, top management, interested or not interested in using this tool and, as a result, possible changes fully the interests of all concerned. It is necessary to understand that in the implementation of in order to maintain a balance of interests in society, methods, regulators, and standards for the use of this instrument should be established.
First, it is necessary to clearly define the concept of “mergers and acquisitions” at the legislative level, since in the absence of this definition it is impossible to unequivocally answer the following questions:
- whether specific economic integration is a merger and acquisition action;
- it is friendly or hostile, for example, a raider takeover. In law enforcement practice, there are situations when the judicial and regulatory authorities come to different conclusions regarding the malicious behavior of the buyer of the enterprise;
- since as a result of mergers and acquisitions, the interests of third parties may also be affected, it is necessary to ensure that the use of the instrument of mergers and acquisitions does not lead to violation of competition, market monopolization, and social conflicts.