Data rooms: room for improvement

M&A has enjoyed explo­sive growth both in the UK and across the world over the last few years with deals val­ued at around $2.66 tril­lion for the first three quar­ters of this year, accord­ing to Thom­son Reuters.  Dri­vers include finan­cial engi­neer­ing and the desire to save on costs.

Data rooms play an impor­tant role by speed­ing up deal com­ple­tion. Their use has increased rapid­ly over recent years and, accord­ing to find­ings pub­lished last year by mar­ket researchers Glob­al Mar­ket Research, the world­wide mar­ket for vir­tu­al data room ser­vices is pro­ject­ed to reach $4.8 bil­lion by 2018.

All well and good, but too few peo­ple chal­lenge the way in which data rooms work in M&A. What if there is more to be squeezed out of these tech­nolo­gies that will ben­e­fit all inter­est­ed par­ties? Has the data room sec­tor rest­ed on its lau­rels? Have the mar­ket lead­ers become lazy and com­pla­cent? More impor­tant­ly, are cus­tomers tru­ly being served?

Many of those cus­tomers look­ing at the sec­tor over the last 15 years will recog­nise the fol­low­ing issues:

Costs

Spi­ralling costs and irri­ta­tion because of charg­ing per page with all its small print and con­tract com­plex­i­ties. Cus­tomers are increas­ing­ly ask­ing, “Why are we sign­ing con­tracts per deal?” and they’re fed up with pay­ing for delet­ed or inflat­ed aver­age-sized pages. Many are also find­ing it dif­fi­cult to man­age deal bud­gets and they feel as if they’re being held to ran­som for post-merg­er inte­gra­tion costs.

Content

Sta­t­ic con­tent is anoth­er bug­bear for many users of data rooms. It’s often nec­es­sary to cre­ate PDF ver­sions of doc­u­ments for secu­ri­ty, but this is time con­sum­ing, with water­mark­ing also pre­sent­ing an addi­tion­al bur­den. Post-trans­ac­tion, dur­ing inte­gra­tion, if native doc­u­ments are need­ed for col­lab­o­ra­tion and edit­ing, this can require fur­ther sourc­ing, which involves more man­u­al work and cost.

How many late night and week­end calls are made and received by frus­trat­ed bankers and oth­er play­ers in a deal who are unable to access the deal plat­form because of the way in which their cor­po­rate desk­top is built, very prob­a­bly due to tech­nolo­gies like Java or Active X get­ting in the way?

Mean­while dur­ing this mobile-first age, when deals could also be done in the mobile sphere, too many data room sup­pli­ers are fail­ing to respond to this demand from cus­tomers.

Those involved in deals often have con­cerns about secu­ri­ty and not sim­ply because of cyber crime. Very often ven­dors have access to deal data. Ser­vice lev­el agree­ments might sug­gest they shouldn’t look at it, but is it real­ly like­ly that 20-some­thing sales guys and bankers aren’t look­ing at Pre­mier League play­ers’ infor­ma­tion in data rooms dur­ing trans­fers?

New data pri­va­cy reg­u­la­tions due in 2017, with their pro­vi­sion for high­er fines – up to 5 per cent of glob­al turnover – as well as the ever­more seri­ous asso­ci­at­ed rep­u­ta­tion­al dam­age of a data breach, are prompt­ing many of those in the M&A indus­try to tight­en their secu­ri­ty pro­to­cols.

Brain­loop clients love the fact that the plat­form works first time, every time on any brows­er

At Brain­loop we’re chal­leng­ing these accept­ed indus­try norms and all the dis­ad­van­tages and unnec­es­sary chal­lenges they bring for cus­tomers. For exam­ple, play­ers in the M&A space, who are con­cerned about get­ting the best val­ue for mon­ey, appre­ci­ate the fact that unlike oth­er providers that charge per page, Brain­loop charges per giga­byte, mak­ing it eas­i­er for clients to con­trol costs. Our cost struc­ture is sim­pler and more trans­par­ent, while our straight­for­ward con­tracts, which pro­vide for mul­ti­ple trans­ac­tions, lead to faster and bet­ter return on invest­ment.

Dynamism

Cus­tomers like the fact that our dynam­ic plat­form allows users to upload and edit doc­u­ments in their native for­mat, instead of the need for con­ver­sion, with PDF con­ver­sion done by the plat­form on the fly when need­ed. Users can also bulk upload and sim­ply drag and drop. Option­al water­mark­ing is also sim­ple and prov­ing to be very pop­u­lar.

Ease of use

Brain­loop clients love the fact that the plat­form works first time, every time on any brows­er. One click and a doc­u­ment or spread­sheet is avail­able imme­di­ate­ly. What’s more, secure con­tainer­ised appli­ca­tions for all the major mobile plat­forms make deal rooms avail­able on the go, unleash­ing greater pro­duc­tiv­i­ty.

Working natively

This inte­gra­tion into Win­dows and the world’s dom­i­nant busi­ness appli­ca­tions, such as MS Office, pro­vides users with an eas­i­er, more seam­less expe­ri­ence, and dra­mat­i­cal­ly reduces train­ing and edu­ca­tion cycles. Post-deal, doc­u­ments are already in their native for­mats in the data room and ready for col­lab­o­ra­tion.

Security

Unlike oth­ers, we ensure that our clients’ data is shield­ed from oper­a­tors and admin­is­tra­tors – only deal par­tic­i­pants ever see doc­u­ments. Data is always host­ed local­ly to over­come juris­dic­tion­al con­cerns. In fact, con­fi­dence about secu­ri­ty at Brain­loop is under­lined by the fact that not only do clients include Allianz, KPMG, Deutsche Bun­des­bank and Deloitte, but one of the UK’s main finan­cial reg­u­la­to­ry author­i­ties also uses its ser­vices.

Rights man­age­ment is baked in to the plat­form con­trol doc­u­ment priv­i­leges and increas­es vis­i­bil­i­ty, while auto­mat­ic water­mark­ing can iden­ti­fy leaks and encour­age more respon­si­ble behav­iour, all of which allows us to lay claim to hav­ing the industry’s most rig­or­ous secu­ri­ty archi­tec­ture. The plat­form is fre­quent­ly pen-test­ed to keep us at the top of our game. No won­der more peo­ple are turn­ing to Brain­loop.

A new dawn breaks in the deal-mak­ing busi­ness with man­age­able costs, greater pro­duc­tiv­i­ty and total peace of mind. Check out what Brain­loop has to offer.

www.brainloop.com

+44 207 183 8285

@brainloop_en

M&A has enjoyed explosive growth both in the UK and across the world over the last few years with deals valued at around $2.66 trillion for the first three quarters of this year, according to Thomson Reuters.  Drivers include financial engineering and the desire to save on costs.

Data rooms play an important role by speeding up deal completion. Their use has increased rapidly over recent years and, according to findings published last year by market researchers Global Market Research, the worldwide market for virtual data room services is projected to reach $4.8 billion by 2018.

All well and good, but too few people challenge the way in which data rooms work in M&A. What if there is more to be squeezed out of these technologies that will benefit all interested parties? Has the data room sector rested on its laurels? Have the market leaders become lazy and complacent? More importantly, are customers truly being served?

Many of those customers looking at the sector over the last 15 years will recognise the following issues: