Virtual Data Room: from managing M&As to securing IPOs

Although Data Room is a necessity for M&A deals, it is also important for IPO as it provides productivity, security and saves time and money. So, why Data Room software is particularly important when it comes to IPOs?

Electronic Data Room in M&A and IPO deals

A successful IPO brings the company financial resources and creates a good foundation for capital growth. An IPO requires the involvement of many professionals: lawyers, underwriters, auditors, accountants, marketers, financial and information specialists, as well as senior company executives and, in some cases, independent experts. Preparation for an IPO often takes a year or more – a time during which serious changes can occur, both in the business and in the market as a whole. 

Thus, the question arises about the use of software that allows both to speed up the process of data transfer without its mechanical retyping, and to automate the analysis of the data obtained. In this case, Data Room is the best alternative.

is an automated program for accelerated processing of accounting data without the use of manual recalculation to carry out all audit procedures required by law and create all the necessary working and final documents

Data Room is changing the user’s approach to working with information and programs. They allow you to access information and servers from anywhere in the world, freeing users from having to have a desktop computer and making it easier for many people who can be in different places to work together.

How does it work?

An audit is an essential tool for firms that enter the stock markets and organize an IPO. After the company becomes public, information about it will be made available to the public and government agencies. This leads to the need to prepare mandatory quarterly and annual reports and conduct periodic audits. An audit is almost always a part of due diligence, that is, a pre-sale check, both for a new buyer (potential investor) and for the outgoing owner, who needs confirmation that in the future there will be no accusations of distortions of reporting.

An important stage in information processing is its storage. Data Room M&A allows you to save data on the audit object in the format of projects, based on which in the future (for example, in the case of working with the same client in the next reporting period), you can form a new set of documents. It helps to prevent duplication of information. For example, the same data on the legal address, the composition of the founders, the types of activities of the company, provided, of course, they remain unchanged for two consecutive years or other audited periods.

Data Room allows you to save time on the following stages of documenting the audit:

  • formation of initial inquiries from the auditor to the audited legal entity;
  • informing the client about the absence of a conflict of interest, observance of confidentiality;
  • transfer of data from the client’s accounting statements for information processing by the auditor;
  • loading data from the client’s accounting program directly for working in the Data Room;
  • assessment of the state of the accounting reporting for errors and contradictions (for example, mismatch of the data of the registers of the accounting database with the numbers in the accounting reporting of the organization);
  • calculation of materiality criteria without the need for manual transfer of indicators to the auditor’s worksheet;
  • drawing up a final audit report.