The most important operational motivation for mergers and acquisitions is economies of scale by increasing production and expanding product range. The source of efficiency improvement can be either one of the production factors or the optimization of the control system. In this article, we will explain how it is possible to survive the M&A process with an electronic data room.

M&A Process with Electronic Data Room

Why is the corporate control market evolving? Why in certain periods of economic development the volumes of such transactions increase rapidly, and in others – fall? What is the reason for the dominance of certain types of integration? Who benefits from a business combination? Experts believe that there is no reason to believe that the waves of mergers and acquisitions are driven by technological innovation and that mergers are being carried out for the sake of economies of scale or the benefits of vertical or horizontal integration. Common to all situations of increased activity in the M&A vdr provider is the relatively high activity of the stock market and high stock prices of companies. However, stock market activity does not explain the growth in merger activity.

Thus, studies in this area usually indicate that a business combination does not lead to a significant increase in operating income, while the shareholders of the acquired companies receive an increase in income reflecting the expectation of the effect of an increased share purchase price, while the shareholders of the acquirer companies receive quite average income (when adjusted for the level of risk). In addition, the researchers note the extraordinary profitability of acquired companies in the period preceding the merger and an increase in the level of systematic risk in companies that have arisen in the course of mergers.

The Way for M&A to Survive with Electronic Data Room

M&A activity began in the 1890s. in the United States and throughout the entire subsequent period, it was wavy, cyclical. There are two explanations for this phenomenon. On the one hand, this is how companies reacted to changes in the external environment, i.e. in their immediate operating environment (deregulation, the emergence of new technologies/distribution channels/substitute goods, sustained growth in commodity prices). 

The heights and wavelengths depended on how many industries and to what extent were affected by these changes. The second explanation is based on the problem of mispricing companies: managers used overvalued stocks to buy assets of undervalued companies, i.e. those of them who considered the shares of their companies overvalued, were simultaneously engaged in M&A transactions, “launching a wave”.

Electronic data room offers two main tools: you can send small and large files to one or more contacts, or get a customized link to share. To use our tool to send large files, you must select the files or folders to send and fill out the form according to your chosen subject:

  1. Select files. Click the “start” button to select the files and documents you want to send, or drag them anywhere or directly into the interface.
  2. Fill out the form.
  3. Send files to your contacts or get a customized link to share. Depending on your needs, our tool offers various functions.
  4. Confirm sending.
  5. After filling out the form, just click “send” to confirm the file transfer.