DUE DILIGENCE

Designed exclusively to simplify M&A due diligence

SO WHAT IS DUE DILIGENCE?

Due diligence is the carefully monitored process of disclosure of information between parties involved in a business transaction. This process ensures each party is exposed to all relevant and necessary facts before making any decisions on a deal, such as in mergers and acquisitions (‘M&A’) or joint ventures (‘JV’).

The term originated in the United States Security Act 1933. If a broker was accused of inadequate disclosure but could demonstrate they had performed due diligence they were protected from liability. From this, the practice soon became industry standard.

WHAT HAPPENS DURING DUE DILIGENCE?

In an ideal world, there would be a due diligence checklist. In the real world, the process changes to suit each transaction.

In M&A, due diligence involves sharing of documents and data relating to the past, present and future prospects of a business to each interested bidder by the company and advisors on the sell side.

The aim is to be as open and transparent as possible, whilst still protecting the interests of the business. However, care needs to be taken, as interested parties could include the seller’s direct competitor. Equally, the deal may at any time fall through or be called off. For this reason, extremely sensitive information may be held back until the final stages of negotiation when it is clear which bidders are serious about making an offer.

WHAT DID PEOPLE USE BEFORE VIRTUAL DATA ROOMS?

Before virtual data rooms there were real data rooms – physical spaces where all the original documents were housed. Interested parties had to book appointments to come and spend time reviewing them in person. High security documents were forbidden from being taken off the premises or copied.

In the case of long distance transactions, this meant that some parties had to travel at length to carry out due diligence. Imagine that!

Thankfully, that is no longer the case. Virtual data rooms have vastly simplified and streamlined the due diligence process for all involved.

WHAT SHOULD I LOOK FOR WHEN CHOOSING A VIRTUAL DATA ROOM PROVIDER?

This depends on your needs, as not all data rooms are created equally.

At one end of the spectrum, there are very simple, no frills solutions, built simply to share documents with minimal security settings and functionality.

At the other end, there are highly sophisticated products with all the bells and whistles, some so complicated they become overwhelming to use.

For those involved in high stake M&A transactions, there is ansarada. At ansarada, we have created a data room designed exclusively to simplify M&A due diligence. We’ve made sure that you will find exactly what you need. And nothing you don’t.

So if you are working in due diligence and interested in finding out more, naturally we would love to hear from you. We will be happy to answer any questions you may have.

DESIGNED EXCLUSIVELY FOR M&A

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