Series 79: 12.3.1. The Data Room

12.3.1. The Data Room

Access to the data room is usually provided only in the final round of the sale process. In the past, the data room was a physical room, typically at a law firm or other location, where junior lawyers and investment bankers would spend countless hours tediously reviewing hard copies of documents. To add to the fun, data rooms were frequently windowless or even subterranean. Today, the data room is usually but not always virtual: electronic versions of the documents are posted on a secure, password-protected website. As a result of this evolution, travel to the data room is unnecessary, and junior lawyers and investment bankers can spend countless hours tediously reviewing documents on a computer screen from the comfort of their own offices.

The sell-side adviser will help design data room procedures and access protocols. Several different vendors offer data room services. The sell-side adviser should be able to monitor data room usage, including information about who has accessed the data room, when, for how long, and what documents were reviewed. Access may be configured to allow particular individuals to view only certain documents.

As part of its final-round due diligence, the buy-side adviser