Common Data Room Features for Mergers and Acquisitions

Data rooms are used for many reasons and situations however, they’re most commonly used in mergers and acquisitions (M&A). A data room is an information repository which both parties can use to look over and access. It’s typically set up to include a range of security measures, including firewalls and encryption to protect sensitive information. Data rooms are frequently used to share private information about business, such as legal contracts, financial documents and other business information that is confidential.

Many data room companies cater to M&A deals and provide a variety of features designed specifically for these types of projects. They’re generally expensive, however certain offer subscription plans which allow unlimited users and lower the cost per user.

The most well-known features of a data space are a well-organized and clear folder structure, a powerful search engine that is able to find keywords and phrases in both the file names and content of files, and the ability to add notes or remarks to a document. It’s important to include a Q&A tool so that stakeholders can receive answers and ask questions in a collaborative setting.

Other features include a watermarking function that displays who has viewed or modified files as well as an auditing tool that helps keep track of changes and activity as well as granular permissions for individual users and groups. Some data rooms also have an advanced function called “redaction,” which blacks out parts of files so that personally-identifiable information isn’t shared.