The success of a merger and acquisition (M&A) deal isn’t guaranteed after the deal is signed and sealed. The integration period is every bit as crucial to ensuring that the acquiring business is able to achieve the goals it intended to with the transaction.  


How to ensure this phase of your M&A goes smoothly? Let’s have a look at how the right tools, including a virtual data room (VDR), can make this process as seamless and as efficient as possible for all parties.


Post-Merger Integrations Are Complex

More often than not, M&A deals destroy value. According to Boston Consulting Group, more than half of M&A transactions fail or underperform.  


Transactions can certainly proceed, but the reason why these transactions fail to unlock their full potential is due to the complexity of the post-merger integration (PMI) — bringing together two organizations, each with its own processes, structure, culture and management.


There are generally four objectives in a PMI.


  1. To maintain ongoing operations in the business — the combined business
  2. To create value by maximizing and accelerating synergies across the combined organization
  3. To align the cultures to motivate employees and management, thereby driving the new, combined company forward
  4. To ensure that the combined company’s competitive position becomes even stronger


Areas for PMI

Some broad areas to consider in a PMI include, but are not limited to, the following.



Data is the lifeblood of any business, and this includes the customer relationship management (CRM) and all mission-critical data related to the companies’ customers, products and services, and intellectual property.



This includes an inventory of all devices, hardware, software, applications, servers, routers and technology in use by both companies.


HR Policies

All documentation related to human resources, including employee compensation, benefits and training, and the organizational structures of both companies, needs to merge seamlessly.



Perhaps the most important element in an M&A transaction is the financial outcome. Any and all financial and accounting data needs to be shared with the appropriate professionals from both organizations.


Why a VDR is Needed for a PMI

Document management is essential not only for the M&A transaction but also for the PMI that takes place afterwards.  
While the financial, legal, and senior management teams most likely used a virtual data room (VDR) to share and review documents during the transaction phase, the same secure data room can continue to serve its purpose after the transaction has closed and the integration process begins.  


Security and privacy of documents are still important to ensure a successful transition. Though the companies may have already merged, there are still several reasons why using a VDR makes sense during the phase of integrating the various operations.  


  • Divestiture: As part of the merger agreement, some of the companies’ products and services, or even entire divisions, will need to be divested. Due to the sensitive nature of such decisions, any and all documentation related to operations that will soon disappear need to be kept private and secure.


  • New or separate legal entities: In some mergers, the parent company might be the same, but due to laws, new operating companies must be formed in order to do business in a particular region or to a particular market. As such, the documents related to the creation of these legal entities need to be kept separate and private from other documents, and so a VDR will need to be kept in use.


  • Additional protection: Even if the merged company uses an enterprise-level, secure, hosted cloud document solution for all employees, a VDR should always be available when the merged company finds itself needing a separate space for sharing documents related to the merger. This is especially true when additional levels of permission and encryption are in order. As mergers can sometimes take years to complete, depending on the size and complexity of the transaction, a VDR can come in handy when private document review between managers is necessary.


Documents and the Need for a Data Room

Across the areas commonly impacted by PMIs listed above, hundreds of documents need to be shared between companies in order to ensure a successful transition period. In addition to being a critical tool during the dealmaking phase of M&As, a VDR is the optimal solution to ensuring that documents are presented to the right people with the right access levels.


Documents that can be considered for sharing in a VDR include but are not limited to the following:


  • Legal structure and articles of incorporation
  • Records of previous capital raises and liquidity events
  • Board of directors — meeting minutes or previous actions
  • Business plans
  • Company financials, including profit and loss statements and projections
  • Tax returns, audits, financial valuations and other reports from third-party professional services providers
  • Intellectual property (IP), including patents and trademarks
  • Product and service information, including roadmaps
  • Marketing plans, strategies and assets
  • Sales strategies and pipelines, including information on existing customers, monthly recurring revenue (MRR) and annual recurring revenue (ARR)    
  • Information about employees, including compensation and contracts
  • Technology investments
  • Additional operational liabilities, including capital expenditures, commercial leases and investments in research and development (R&D)


The Best Solution for Virtual Data Rooms

While deals principally seek to create shareholder value, successful mergers can accomplish much more than that. According to corporate services company CSC, M&A deals can extend corporate power, increase market share, aid in diversification, and enhance a company’s likelihood of obtaining future financing.


A VDR needs to be more than simply a version of cloud document management and security for those involved in corporate and financial transactions. Organizations should consider an enterprise document security solution like Caplinked that has years of experience providing data rooms for sensitive and complex M&A transactions and their integrations afterwards.  


Ready to see if Caplinked is the right tool to facilitate the integration period of your M&A deal? Sign up for our 14-day free trial today.


Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as security, mobility, e-commerce, and IoT.



BCG – Post-Merger Integration

CSC Global – Filings for Successful Mergers and Acquisitions