Data loss ‘undermining M&A deals’

A survey of UK executives involved in mergers and acquisition (M&A) deals has found that 71% have experienced delays in completing them due to a loss of critical data. The hold-ups includes the temporary or permanent loss of information located in documents, emails, devices and IT systems.

The industry research was carried out by ansarada, a London-based dedicated virtual data room provider for M&A deals, which notes that in the first eight months of 2014 alone a total of 339 planned deals worth £256bn collapsed; the highest number since 2008. Reasons ranged from lack of board engagement to regulatory interference, with loss of data from cyberattacks also having an impact

Ansarada canvassed 520 bankers, lawyers, consultants and accountants specialising in M&A, and asked them to highlight the barriers faced by the industry when it comes to closing deals efficiently and on time.

Responses indicated that data losses typically accounted for deals being delayed by an average of 12 days. The research also found that 11% of dealmakers were not certain that their data was secure while trying to close deals during 2015.

“Considering the sensitive nature of M&A deals, it’s alarming to think that ‘data-loss’ remains such a big issue for the industry,” says Stephen Dearing, Europe, the Middle East and Africa (EMEA) managing director (MD) of ansarada.

“With recent advancements in technology and security policies, dealmakers should be in complete control of the information they need to close a deal efficiently and to a tight deadline.”

Four basic tips

Ansarada has offered corporates and financial professionals four basic tips, which it believes can reduce delays in M&A activity by keeping them on track and secure:

• Make sure you run your Q&A process through the data room. Using emails to conduct your Q&A could lead to breaches of confidentiality and information around negotiations being leaked. Keep your Q&A in one secure and auditable environment.
• Ensure you implement your document security and permissions before bidders enter the data room. Planning enables a seamless bidder experience and allows you to keep complete control of your documentation.
• To prevent document leaks, ensure that deal documents have a dynamic watermark on them which keeps individuals accountable for the security of the documents in their possession.
• Enable flexibility by applying functionality that allows you to revoke access to saved documents at any time.

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