How To Handle Bolt-On And Tuck-In Acquisitions In Virtual Deal Rooms?

Mergers and acquisitions have become one of the main ways to implement the development of companies in modern conditions. In this article, we will analyze types of acquisition and the role of the Data Room in this process.

Bolt-On And Tuck-In Acquisitions

Mergers and acquisitions are global processes that affect almost all countries of the world and are of great importance for the successful development of business. A corporate acquisition is a process whereby the shares or assets of a corporation become the property of the buyer. This transaction can take the form of buying shares or buying assets. It is a general term used to describe the transfer of ownership

Such a transaction is carried out through the acquisition of at least 30% of the authorized capital of the absorbed company. At the same time, legal independence is preserved. The acquisition is one of the market mechanisms for dealing with market laggards.

There are two kinds of acquisitions in a case when a large company captures the smaller one – bolt-on and tuck-in. Bolt-on is a takeover of a company that is different in respective business models, markets, products, geographic relevance, and cultures. Tuck-in is an acquisition of a smaller company with similar business models and products. 

What is Virtual Deal Room?

Successful investment management requires sharing hundreds or thousands of documents. The enables the quick and inexpensive exchange of examination material, documentation, and the coordination of the final documents during the due diligence procedure.

Data Room is a digital platform that provides a secure data repository and collaborative workspace for holding business transactions including M&A deals. The important function of the Data Room system is the creation of a unified information base, where all data related to the deal transactions of the company is entered and provided to all employees, taking into account their access levels. This allows you to significantly speed up most business processes, including the same workflow and even a simple exchange of information between contractors.

The main goals of the implementation of Data Room deal management systems include:

  • reducing the time required to complete basic processes;
  • increased transparency for all participants in business processes;
  • improving the organizational flexibility of the Data Room implementing company;
  • control of all indicators: costs, task execution time, identification of company vulnerabilities;
  • simplify process analysis and performance optimization.

Implementation and application of modern Data Room allow to fulfill the basic requirements of business: instant deployment of all processes, accurately define solutions, adapt to constantly changing conditions, increase productivity through efficient use of all resources, minimize project risks, improve customer service.

In addition, the software offers extensive data management, control, and transparency, and an efficient orchestration engine to prepare for disaster recovery. This functionality allows Data Room to deliver solutions for managing any business data in different spheres.

Virtual Data Room offers a secure, highly functional, and sophisticated version of more general cloud file sharing and storage solutions. Products range from software for virtual data rooms, which is used to host business transactions such as the sale of commercial real estate, to intelligent workplace and portfolio management solutions. The AI-powered platforms have several functions such as extended permissions, automatic indexing and naming of documents, integrated document translation, communication features, and intelligent search, which simplify the management of confidential data regardless of the requirements.