Firmex - ACQ - Article
Transcript of Firmex - ACQ - Article
26 FOCUS
Virtual Datarooms
Smooth online operations
Removing time-consuming paperwork from the deal process
can surely only be a good idea. ACQ Magazine looks at the
benefits of Virtual Datarooms.
due diligence documents in an online environment,
ultimately negating geographic distance and time
limitations, and extending your reach to the maximum
number of potential buyers. "The ultimate benefit provided by VDRs is a method
by which to retain control over their use. This is done
through tiered security settings and encryption
technology that allows administrators to oversee access even to downloaded files."
PhilipWhitchelo isVice President of Product Marketing at IntraLinks, who have been at the forefront of VDR technology, creating the first in 2002 for the M&A
process. "With a traditional dataroom it can take weeks to
prepare and assemble documents into binders, all the
while a business continues to operate and information
changes," said Philip. "Even a well-organized paper
dataroom can become inefficient and information
Some might feel that thumbing through sheets of paper, no matter how well filed, in order to locate
those important documents pertaining to an M&A
deal is a scene that doesn't belong to this century.
However, some who have been involved in mergers
& acquisition activity for a long time simply stick to
the process they are familiar with and might even
be a tad technophobic. Those at the cutting edge of
technology that aids the process are convinced that
Virtual Data Rooms are the way forward. Saving time, money and, albeit to a much lesser extent,
the planet is surely of interest to anyone. In that respect,
using Virtual Datarooms as opposed to traditional
document folders will have an obvious attraction to
those in the M&A fraternity.
outdated. With multiple buyer agents combing through
binders and folders, over time documents get misplaced,
disorganized or worse, removed intentionally or unintentionally by a buyer."
"Because of these issues traditional datarooms can
create longer review times and complaints from buyers
of not having access to necessary information. And, if a
company completes a fiscal quarter during the review
process buyers need to be updated, which may require
a return visit to the dataroom if the information is too sensitive to be distributed by email or mail." Security "Despite best efforts and security, confidential
information can be misplaced or removed from a
Speed Tankut Eker Director of Business Development for
TransPerfect Deal Interactive, whose VDRs offer super
fast load times and a 24 hour service team, explained:
"Virtual Datarooms can reduce the amount of effort
and resources spent on traditional paper exchanges,
shipping costs, and time lags associated with outdated
paper data rooms. VDRs not only eliminate the need
for hard copies, but also the time and resources spent
managing documents, and providing secure settings for
the due diligence process. "VDRs are a collaborative solution that can accelerate
and simplify the M&A process by securely hosting
physical dataroom"Philip continued."With a VDR, access , controls restrict who can see what documents and when.
Advanced security features ensure no unauthorized
printing, copying or downloading of documents.
And auditing trails track which documents have been
reviewed by whom, virtually eliminating untraceable
information leaks; reducing instances of compliance risk;
and protecting tens of millions of dollars in value during
negotiations. Syndicus Solutions are committed to offering
user-friendly solutions for capturing, managing and
protecting data that can save time and money. Director
Michael Reddy said: "The system is extremely secure -
you have full control over who can access the dataroom
ACQ September 2011
FOCUS 27
Virtual Datarooms
and which documents they can see. If a particular user
is not meant to see a document, he/she will not know it exists."
Joel Lessem, CEO of award-winning deal room provider
Firmex said: "At a high level dealmakers should not be
sharing large volumes via email, thumb drives, FTP, CD or
courier. It's too insecure and inefficient. Nor should they
be using freemium services (Dropbox, Google Docs) that
don't comply with the highest level of security audits
and compliance. It's simply not worth having a breach of confidential information." Organisation "Deal rooms are used for a buyer or buyers to perform
their due diligence on a pending large transaction," Joel
continued. "The goal of Due Diligence is to identify any
problems that may be material to the business. When
the information is not readily available or well organized,
buyer uncertainty can develop. "Deal rooms help accelerate deals to close. Because it is
online, due diligence can now be done simultaneously by
different buyers. This can significantly shorten the
diligence timelines as multiple buyers can review
documentation without knowledge of other bidders simultaneously rather than sequentially."
"Law firms, investment banks and corporate deal
makers are, increasingly, licensing unlimited use data
rooms as part of their infrastructure so they can get
clients organized from the start of the mandate through
to the closing of the deal, rather than waiting for the last minute to get a data room."
Due diligence is certainly a key theme here and as
a vital and lengthy part of M&A, many will no doubt
appreciate the ability to cut time without compromising
the process in any way. "A virtual dataroom can greatly improve the efficiency
of the due diligence process, speeding up the time spent
to manage the transaction as well as providing greater
control over the disclosure process," said Michael Reddy, listing several points:
"The record of documents placed within the dataroom
can be made to accord precisely with the document
list comprised in the draft Disclosure letter; you can be
absolutely sure that all visitors to the dataroom are seeing
the same set of documents, minimising duplication
and access to superseded documents; multiple buyers
accessing the system will be totally unaware of each
other; the dataroom is available 24/7 from anywhere in the
world, with multiple individuals accessing the system
concurrently; full electronic audit trail supports effective management of the process."
All companies agree that language is not a barrier when it comes to VDRs as Tankut Eker pointed out:
"With the growing presence of cross-border M&A
activity, VDR providers have become aware of the need for
multilingual reconciliation and have made a good
number of steps technologically to address this need. For
instance, our platform, Deal Interactive, provides a
multilingual platform that is localizable in more than
twenty languages so that users can long into the deal room in the language of their choice." Reducing costs "The hard costs, related to real-estate, people resources,
travel costs and logistics to set up and manage the
physical process are easily calculated, although they vary
greatly for each transaction," Joel explained. "And, there are
further cost savings that can be realized by working with
the right VDR partner. A subscription model that
encompasses the unlimited deals, pages, training and support creates cost certainty."
"The market is growing, maturing and becoming
much more affordable to use on a continuous basis for
financial transactions and related diligence processes.
Many corporations are adopting VDRs on a subscription
basis because they are regularly engaged in financial
transactions and share large volumes of documents
with 3rd parties. Intermediaries are also subscribing on a
continuous basis. I predict, for any organization engaged in
financial transactions to 'not have a permanent and
unlimited use VDR' facility in the future, they could find themselves at a competitive disadvantage."
Philip Whitchelo concluded: "Rather than maintaining a
paper dataroom for several months so that teams have
sufficient time to review an assortment of information, a
VDR allows prospects to access documents
simultaneously through a standard web browser. The
result is often shortened timeframes by as much as 50
percent. Updated or supplemental information is
simply posted to the VDR and buyers are notified
electronically—a process that takes minutes. And,
most best-in-class VDR providers can have a VDR up and
running in less than 30 minutes and offer scanning services to put physical documents online."
ACQ September 2011
28 FOCUS
Virtual Datarooms
Founded: 1996 • Virtual Data Room history: In 2002 created the world's first virtual data room to support the M&A due diligence process. • Usage: Its roots are in financial services especially M&A, Debt Capital Markets and Alternative Investments but its platform
hasalso extended to multiple corporate use cases. • VDR clients: Trusted by over 1 million individuals and counts over 800 of the Fortune 1000 as users including the top 50
financial services companies and top 25 law firms in the world. • Security: SAS 70 Type II certified and successfully undergone more than 100 security audits by customers and independent
auditors. Highest level of encryption applied and advanced
security features ensure no unauthorized printing, copying or
downloading of documents. • Speed: Can have a VDR up and running in less than 30 minutes and offer scanning services to put physical documents online. • Quote: : "IntraLinks is a global Software-as-a-Service provider and has become a standard by which companies collaborate,
manage and exchange their critical information in a secure, auditable and compliant manner."
INTRALINKS 44 Featherstone Street London, EC1Y 8RN T: +44 (0)20 7549 5200 F:
+44 (0)20 7549 5201 E:
www.intralinks.com
Philip Whitchelo
Founded: 2006 • Virtual Data Room history: Since 2006 Firmex has been licensing online virtual data rooms for corporate transactions, governance
and compliance matters. • Usage: In addition to financial transactions their software is also used for an array of diligence and compliance related processes
such as financial audits and document-based reporting for
compliance purposes. • VDR clients: Investment banking, Legal, Private equity, Life Sciences, Real-Estate and Resources. • Security: SAS 70 Type II compliant data center facility hosted by SunGard, the same company that serves the world's 25 largest
financial services firms. • Speed: Complex new projects can be set up in minutes - pick a template, upload documents, select your users, and get to work. • Quote: "In a nutshell, we are intuitive, affordable, and deliver deal specific expertise." Firmex 110 Spadina Avenue Suite 700, Toronto, Ontario M5V 2K4 Canada T: 44(0) 20 3371 8476 (EU)
1.888.688.4042 (NA) E: [email protected] W:
www.firmex.com
Joel Lessem
ACQ September 2011
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Virtual Datarooms
Founded: 2010 • Virtual Data Room history: The management has been delievering VDR for the last five to six years • Usage: Stand-alone web based solutions for legal and financial firms, with audit, back up and other support options. • VDR clients: Law firms, investment firms, oil and gas, mineral exploration and property management firms • Security: Full permission based system giving clients total control over access and usage. • Speed: Guaranteed fast delivery, with scanning and support, if required • Quote: "Our experience in financial markets, legal services and regulation enables us to match our clients' needs quickly and effectively"
Syndicus Solutions Limited Rotherfield House 7 Fair Mile Henley-on Thames RG9 2JR T: 0118 375 0465 E: [email protected] W: www.syndicussolutions.co.uk
Founded: 1992 • Virtual Data Room history: Expertise in delivering virtual Datarooms over a five year period. • Usage: From scanning hardcopies in our world-class document management facilities to setting up user and admin roles based
on clients'specifications, around the clock. • VDR clients: M&A, legal,
financial services • Security: TransPerfect Deal Interactive's VDR hosting environment is
SAS 70 Level II certified.This is the gold standard for safeguarding
electronic data in the financial services industry. • Speed: The fastest load times in the industry and a service team that works around the clock. • Quote: "Not only does Deal Interactive provide intuitive, web-based document repositories, but it can also insure that all
aspects of multilingual transaction support is comprehensive, accurate, and effective"
TransPerfect Deal Interactive 120 Fenchurch Street 3rd Floor London EC3M 5BA T: 0044 (0) 207 398 8200 F:
0044 (0) 207 398 8202 E: [email protected] W:
www.dealinteractive.com www.transperfect.com
Michael Reddy Tankut Eker
ACQ September 2011
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