Data room

The data room is structured according to an index: corporate, finance, tax, contracts, HR, IT, real estate, environment. Bidders receive read access, often without download or print rights. Questions are handled through a Q&A module. All access and answers are logged and are often later attached to the purchase agreement as an annex.

For a mid-sized company, setting up the data room is usually the most time-consuming step of the sale. Documents are scattered across the tax adviser, physical folders and email inboxes. A complete, well-organised data room shortens due diligence and reduces purchase price discounts caused by uncertainty.

The content of the data room determines what the buyer is deemed to know. Many purchase agreements exclude warranty claims for matters that were disclosed. Employees' personal data is subject to the GDPR and is redacted or aggregated. Data that is highly sensitive with regard to competitors is disclosed in stages or in a clean room.

Example

Hypothetical example: A service company with 80 employees uploads 1,200 documents into 9 main folders. Over four weeks, three bidders ask a total of 240 questions, an average of 80 per bidder. The payroll list is provided only in anonymised form by job group.

Virtual vs. physical data room