Mergers and Acquisitions & Protection of Confidential Documents


M&A documents are sensitive as they contain trade secrets, deal details, employee data, financial records, and confidential information about stakeholders and investors. With business fraud at an all-time high, keeping M&A documents secure is a necessity. 

Reducing security risks is crucial for the success of M&A deals. In a recent survey, nearly 85{a1ae43ceea9dfe112387d9bed445b9f9260808df0f7e6b43d56218867d837494} of respondents believed that the risk of security attacks had increased over the past few years, and one in five respondents had a data security attack impact their bottom line. However, the survey also revealed that only 65{a1ae43ceea9dfe112387d9bed445b9f9260808df0f7e6b43d56218867d837494} of respondents had strengthened security measures recently, and only 43{a1ae43ceea9dfe112387d9bed445b9f9260808df0f7e6b43d56218867d837494} received security training. 

Though deal making professionals understand the importance of ensuring confidentiality during the M&A process, most of them are not aware of the various security measures available to keep their documents safe.

What is the Cost of Poor M&A Document Security?

According to a study, the global average cost of a data breach is $3.92 million in 2019, a 1.5{a1ae43ceea9dfe112387d9bed445b9f9260808df0f7e6b43d56218867d837494} increase from 2018. 

Theft and leakage of M&A documents can have far-reaching consequences that go beyond data breaches and may impact future investments and acquisitions. According to another study, sophisticated hackers can infiltrate even complex IT networks and stay undetected for more than 200 days. Sensitive information about business strategies and personnel data can be stolen over several months. Sometimes the acquired company ends up paying a hefty penalty to settle lawsuits and fraud charges imposed by unhappy shareholders.

Ways to Keep M&A Documents Secure

Data security threats are becoming a bigger concern for businesses, especially in the M&A space, but there’s a lack of knowledge on how to prevent these threats and combat them when they occur. 

The following security practices and tools will help you ensure the highest level of security:

Use Passwords to Limit the Access

All confidential files must be password protected. You can even do password protection at the folder level. However, make sure that passwords are not easy to guess and are changed regularly as a preventative measure. A secure password contains a combination of capital and lower-case letters, along with at least one unique character and one number.

Train Employees

Though employee training is not connected to any security tool or software, it is necessary because employees do most of the file mishandling. Your employees may not leak the information intentionally, but a disaster can happen because of their lack of awareness in handling sensitive documents. It is a good idea to arrange a training session to make employees aware of the importance of the safe-keeping of files.

Use a Virtual Data Room (VDR)

VDRs are compliant with various security standards and are equipped to meet your data protection and privacy requirements. The access to encrypted documents typically requires two-factor authentication and can be controlled at a granular level. Some VDRs also use an antivirus to protect against malware, which is often attached to Word documents, Excel, and PDF files, all of which are commonly shared during the M&A process. However be aware that if passwords are used to login then these can be shared with others along with your documents.

Implement eSignatures

When you need a critical document signed by someone who is not physically there, it is advisable to use eSignatures or digital signatures rather than scanning and emailing confidential forms, which poses a potential security risk. Simply emailing the forms will allow the recipient to take a print-out and distribute the information to unauthorized users. eSignatures allow you to safety exchange files and have an authorized signature added by the recipient without compromising security.

Provide Extensive Security Using DRM

In addition to restricting access to documents, you must also limit how and where they are being used. This is where Digital Rights Management (DRM) comes into the picture. DRM provides specific security and access controls, such as controlling who can view documents, what devices they can be used on, how long they can be used for, and from what locations. With DRM, you can control and track viewing, editing, printing, copying, screen grabbing, as well as location- and device-specific access. You can also set the expiry date of documents as well as put dynamic watermarks with the system and user information on printouts to track the distribution of hardcopies.


There are many more solutions and tools available to keep your M&A documents safe and secure. It would help if you chose a solution that fits your business needs. Remember to look for proven data security products from reputable companies before implementing a solution. Most importantly, be vigilant and practice good security practices to protect your business documents and devices from intruders.

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