Document Vault Blog

A virtual data room (or deal room) is an important tool for carrying out due diligence on a mergers & acquisitions deal.

The due diligence process requires individuals on the seller's side to share documents which can then be reviewed by the legal and financial advisors on the buyer's side. An online data room provides significant advantages over traditional physical data rooms in that all documents can be indexed for quick retrieval.

Organising the documents into a hierarchical folder structure brings order to your data room, allowing quick and intuitive navigation through the document tree. A typical folder structure will include any of the following types of information:

• 01 - Financial Information     
• 02 - Regulatory Information     
• 03 - Statutory Information     
• 04 - Borrowing     
• 05 - Investment Portfolio     
• 06 - Agency Contracts     
• 07 - Intellectual Property     
• 08 - Information Technology     
• 09 - Properties     
• 10 - Employment     
• 11 - Group Information     
• 12 - Litigation     
• 13 - Operational Information     
• 14 - Business Development     
• 15 - Employment Schemes     
• 16 - Dormant Companies     
• 17 - Acquisitions and Disposals     
• 18 - Marketing     
• 19 - Attachments to Responses

A numbered folder structure provides a more intuitive interface to navigate and find documents and to report on individual documents in the archive.

The process of adding documents to the data room includes:

• Scanning documents to readable PDF in which all words are captured by optical character recognition (OCR).
• Organising documents into a hierarchical folder structure on your local computer. Documents will typically include scanned documents, PDFs, Excel and Microsoft Word documents, together will JPGs and other image formats.
• Once organised on your local computer, the folder structure will be uploaded in bulk to the data room.
• During the upload process, the documents will be indexed, facilitating full text searches on the data room at a later date.

One of the major advantages of a hierarchical folder structure is that access to individual folders or documents can be restricted so that the most sensitive information is made available only to the people who need to review that information. This is particularly important where personal information is concerned. Additionally, it provides a means to release information to the buyer's team in tranches, so that the most sensitive and business critical information is released when the ground has been laid for this to happen, improving the chances of a successful transaction.

See also:

1. Restricting access to documents
2. Organising your documents in the data room.
3. Guaranteeing anonymity.