Why the Data Room is required? What type of information is maintained in the Data Room?

Requirement of Data Room: Removes ambiguity in the minds of buyer about the profitability, growth prospectus, and sustainability of business that is proposed to be bought. Provides material information that helps in doing a SWOT analysis. It enables the buyer to do a better bargain through the analysis of the data. May expose the weakness of the seller which is not directly provided to the buyer For example, a material off balance sheet transaction. Provides data that helps in better Valuation of business for both buyer and seller. Type of information provided under a data room: The following are the examples of information that is provided in a Data Room: Financial documents such as Annual Reports, Financial statements filed with regulatory authorities, cash flow statements, documentation with bankers etc. Basic corporate documents such as certificate of incorporation, Memorandum and Articles of Association, Share-holding agreement, various types of registrations, documents on General and Board Meetings, insurance contracts etc. HR information. Equipment and information on operational aspects. Information relating to sales, marketing etc. Compliance related information Information published in media. IPR details. Information on litigation.