How to build a Data Room.
A comprehensive structure for an effective merger or acquisition.
Data Room Dynamics
When preparing for a merger and acquisition (M&A) transaction, creating a comprehensive data room is one of the most crucial tasks. The data room is the primary way potential acquirers or investors conduct their due diligence on your company. It must therefore contain all relevant information about your business. However, also bear in mind that disclosing too much sensitive information too early can create business risks. In terms of content, you would want to cover the following:
Corporate Documents
- Articles of Incorporation / Certificate of Incorporation
- Bylaws
- List of Subsidiaries and their Organizational Documents
- Board and Committee Meeting Minutes
- Shareholder Agreements
Financial Information
- Annual and Quarterly Financial Statements (Last 3-5 years)
- Tax Returns and Audits (Last 3-5 years)
- Accounting Policies
- Debt Instruments
- Material Contingent Liabilities
Business Operations
- Business Plan
- Products and Services Description
- Marketing and Pricing Strategies
- SWOT Analysis
- Customer and Supplier Lists
- Vendor Contracts
Intellectual Property
- List of Owned IP (patents, trademarks, copyrights, trade secrets)
- IP Licenses and Royalty Agreements
- Pending or Threatened IP Litigation
- Employee Agreements related to IP
Legal Matters
- Active and Potential Litigation
- Regulatory Investigations
- Significant Contracts and Agreements
Employee and Management
- Organizational Chart
- Employee List (with roles, compensation, tenure)
- Employee Contracts
- Employee Benefits and Pension Plans
- Union or Collective Bargaining Agreements
Material Contracts
- Partnership Agreements
- Revenue Agreements
- Supplier Contracts
- Customer Contracts
- Lease Agreements
Real Estate and Environmental
- Property Deeds
- Lease Agreements
- Zoning Approvals
- Environmental Assessment Reports
Regulatory Documents
- Compliance Documentation
- Correspondence with Regulatory Bodies
Information Systems
- Overview of Major IT Systems
- Cybersecurity Policies
- Data Privacy Protocols
- IT Contracts and Licenses
Each of these categories should be a separate folder in your data room. Within each folder, you can have subfolders for more specific categories or years. Having a well-structured data room not only simplifies due diligence for potential buyers but also demonstrates your company's thoroughness and attention to detail. It's essential to work with legal counsel and other professionals during the preparation phase to ensure all necessary documents are included and organized appropriately.
About Orb
Investment Risk
Products
Placement Agent
Investor Relations
Orb MCL. 2024
Orb MCL operates within the investment sector. We have conducted a thorough review of the Financial Conduct Authority (FCA) regulations based on the nature of our services and activities. While are not required to be authorised or regulated by the FCA, we use these guidelines to remain committed to upholding the highest standards of conduct and professionalism in all our operations.