Asset sales are crucial to long-term strategizing across all industries. Although every transaction is unique, security and convenience are the primary requirements for any deal-processing tool. Let’s take a closer look at asset sales and explore how modern virtual data rooms simplify such complex arrangements.

asset sales and data rooms

What are asset sales?

Asset sales are business transactions that involve a complete or partial selling of a company’s possessions. Instead of selling the business as a whole or issuing public-traded stock shares, the organization’s leaders liquidate some of the tangible or intangible valuables, such as:

  • Equipment
  • Inventory
  • Intellectual property
  • Real estate
  • Goodwill
  • Operation licenses
  • Client bases

For example, a clothing producer can choose to sell some outdated yet still operational sewing machines to generate liquidity and purchase newer models. Other asset sales cases include, but are not limited to:

  • Risk mitigation
  • Restructuring
  • Succession planning
  • Mergers and acquisitions

Note that asset sales are typically processed in exchange for long-term debt obligations, not cash. Additionally, the seller retains ownership of the business after the transaction goes through.

  • Insight: For tax-related reasons, the buyers prefer asset sales more than the sellers. Depending on the tangibility of purchased assets, the purchaser gains substantial tax benefits and improves cash flow — especially for newer companies.

For the seller, asset sales translate into higher taxes associated with tangible possessions. However, selling assets is the only solution for the incorporated businesses since there is no stock to trade.

How VDRs improved asset sales

Asset sales are unique in every case, as they depend on the business type, the assets in question, and many other impact aspects. However, every deal will, in one way or another, structure around three major stages:

  1. Valuation: the determination of the asset’s value based on the current market.
  2. Due diligence: exploring all underlying factors by inspecting documents.
  3. Negotiations: finding the mutually beneficial sale/purchase conditions.

Historically, asset sales involved several physical meetings. But with the global trend moving towards digitization and remote deal handling, more and more transactions take place on virtual platforms, such as online data rooms.

Virtual data rooms are far more than storage spaces. Depending on the provider, the VDR can offer tailored deal processing solutions, advisory, military-grade security, and enhanced communication tools.

As asset sales build on confidential data and extensive communications, data rooms come in extremely handy. Both buyers and sellers benefit from:

  • Faster data exchange
  • Informed decision-making
  • Versatile collaboration approaches and more

Now, the challenge is to find a virtual data room that meets the requirements of asset sales transactions specifically. Many VDR companies choose to specialize in particular deal types and provide tool sets accordingly. Therefore, the best way to find a data room for asset selling is by focusing on distinct features and characteristics.

ShareVault VDR features for asset sales

Before you dive into the detailed features and technical advancements of any VDR, ensure that the platform is secure and easy to use. Security indicators include things such as compliance and certifications by authorized issuing organizations (ISO, SOC, HIPAA, etc.) and safety features like automated encryption or two-step authentication.

The convenience factor will be less on the nose, and you probably won’t get a full picture until you start using the tool. However, you can still read through user reviews or request a free demo from the provider to get a general idea.

Once you are sure that the data room is both simple and safe to use, it is time to move on to the specific features that will benefit asset sales transactions. As mentioned before, the VDR providers often concentrate on specific niches to ensure top-quality service for particular transactions.

ShareVault is the leading virtual data room company in the asset sales segment. They present high-level security in combination with user-oriented software.

  • Insight: ShareVault is a California-based VDR provider that focuses on innovation and security, offering practical solutions for various business transactions. 

Below is the summary of ShareVault features that you will find helpful for asset sales deals:

  • Flexible access permissions. As a deal progresses, data room users will require different levels of access to various documents. In asset sales, this translates into the seller slowly gaining trust in the buyer and offering them to view more confidential data.
    • Tip: A “view as” feature can help you to see exactly what parts of information are available to each user. It is best to try this function before inviting everyone to the virtual data room.
  • Remote shredding. AES-256 bit encryption allows you to revoke access to documents—even after they’ve been downloaded. This feature comes in handy when a buyer backs out or you no longer wish to work with them.
  • Time restrictions. Due diligence is a lengthy process, whether it is an asset sales deal or any other type of business transaction. One way to speed up the document review is by setting access expiration on the files. This way, the buy-side will know that time is of the essence.
    • Tip: You can also adjust the time limitations according to your time zone. This way, the buyer will only be able to review documents when it is convenient for you and allowing you to react quickly.
  • User activity tracking. You can use the activity reports to see the deal progression better and rearrange files if necessary. Additionally, if you are dealing with several potential buyers, the report will indicate the levels of interest and help you focus on more promising opportunities.
  • External tool integrations. Advanced virtual data rooms have pretty versatile toolsets. However, some asset sales deal participants might be more comfortable using the familiar instruments. That’s when external integrations come into play. 

ShareVault offers integration with the following tools:

  • DocuSign
  • Box
  • DropBox
  • SharePoint
  • Microsoft 365.
  • Q&A. An interactive questions and answers tool can help during all asset sales stages, but especially during due diligence and negotiations. You can respond to frequently asked queries in advance or answer them in real-time.
    • Tip: Try to keep all Q&A interactions within the platform to avoid data leaks.

The future of asset sales

Asset sales can be quite complex. However, with some help from professional advisors, a solid understanding of the current market, and a functional set of digital instruments, the deals can be processed much faster and more effectively.

Concentrate on the long-term vision for your business and make sure to prioritize data security every step of the way.

Leave your review