Beyond Due Diligence - The 2010 increase in cross border M&A demands a more tightly integrated approach to ensure transaction success
10 June, 2010
Written by: Bree Galvin, General Manager at e.law Asia Pacific
Published in ACLA June 2010
The world of mergers and acquisitions has moved far beyond domestic or local markets; according to Thomson Reuters M&A review cross-border M&A reached $84.5 billion in Q1 2010, a 79% increase over the same period last year. This increase in transactions is obviously good news for a global economy that has suffered a tumultuous time over the past two years. However, globalisation of this deal-making introduces a whole new range of challenges to acquisitive companies.
Tight time frames and restricted availability to accurate information has always been a challenge to vendors and buyers alike. This challenge is compounded when dealing with parties and information that is located internationally. Much of this increasing complexity was solved with the evolution of the online data room, with the data room environment virtualised and accessible over the internet from anywhere in the world 24/7.
A robust due diligence process is fundamental in contributing to the success of any transaction, however more importantly is the ability to intelligently integrate findings post due diligence. It is at this stage where many organisations lose their competitive advantage.
“The ability to unearth the risks of a deal runs somewhat second to the ability to ensure that these risks are mitigated when the contract of sale is negotiated. Companies often fail to take such risks into consideration when they reach the pointy end of the transaction” comments Mark Petty, head of Software Products at e.law Asia Pacific.
Providers of online data room software have responded to market demand to offer a more tightly integrated support platform and have developed their offerings to include collaborative functionality. Petty notes “your online data room software should now provide you with a singular collaborative interface to manage the complete M&A lifecycle, that being creation of your information memorandum, document collection, due diligence, contract negotiation and sale and purchase agreement.”
ACLA:Beyond Due Diligence by Bree Galvin
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