What Is an Online Data Room For M&A?

An online data room is a repository of documents accessed via the Internet, with secure access provided by user identification and password. It provides savings in costs compared to traditional physical data rooms. It also provides many other advantages including easy search functionality, collaboration capability, and security of sensitive information.

When conducting M&A the seller must upload all relevant documentation to an online data room so that it is accessible by the buyer’s side. This is vital because due diligence is a critical element of the M&A process and failure to have all the necessary documents could slow down or stop an acquisition.

M&A VDRs have a wide range of features. From simple drag-and drop uploading of files, to optical character recognition that indexes and creates an logical structure for the data room by using index numbers. Some of them offer granular document permissions which allow users the ability to specify access restrictions for specific folders and files. Other options include multi-factor authentication, which gives users the option to verify their identity in only a few steps, such as by entering a one-use SMS code.

A reputable company that offers an online data room will have a support staff ready to assist you around the clock. Some have chat or phone line, while others have multiple support channels including email and live video conferences. They also offer comprehensive help guides, and an area where customers can ask experts any question.