MergerMarket recently published a study on content management throughout the M&A
process (the Report), interviewing several
business executives who shared their thoughts on the key role of
content management in the timing and closing of M&A
transactions. The Report highlights the biggest challenges in
managing M&A transactions, as well as risks associated with
improper content management:
Diligence – In managing content, users
must grow accustomed to the security and access controls available
via virtual data rooms (VDR). The need for
security is especially pertinent in the context of a merger of a
publicly-listed company, where risks related to improper content
management could have adverse effects on share price.
Post-diligence issues – There are
risks related to how data is used and shared after it is downloaded
from VDR. As users log onto VDR, download content and save it
locally on their hard drives, sellers and financial advisors lose
control over information. Meanwhile, having security settings that
do not allow users to download documents is unrealistic in a
process where several users need to evaluate information. Unlike
paper copies, it is difficult to ensure that electronic files are
destroyed or returned.
The M&A process represents a large time commitment for
dealmakers, lasting months or even years. The Report highlights how
managing content can make or break a deal. Attempting to align
several parties on a variety of different systems provides
challenges to both seller and buyer resources. The Report
recommends an additional platform to support the deal process
– Content Management Systems (CMS). CMS are
typically easy to use and have both intuitive and customizable
user-interfaces. CMS ensure that users are not limited to one
workflow option or content structure. CMS can also allow working
groups to collaborate on documents in a secure environment –
anywhere – making them especially useful in cross-border
M&A. Key stakeholders can comment or share their work, making
coordination much more manageable. Finally, CMS also provide for
encrypted storage systems, heightening user security.
The author would like to thank Sam Zadeh, articling student,
for his assistance in preparing this legal update.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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